Reliance Jio, ‘the largest 4G network in the world’, has finally become a reality. And tariff plans announced by it have very clearly ushered in a new era of price competitiveness in India’s telecom industry. The inefficient would die or be taken over. This reality was also expressed in the country’s stock market where shares of major telecom companies crashed. At 1.15 pm, on the BSE, Airtel was down 6.39 per cent, Idea Cellular 8.13 per cent, and RCom 4.08 per cent.
Chairman Mukesh Ambani announced on Thursday at the Annual General Meeting of Reliance Industries in Mumbai that his $20 billion telecom enterprise would start offering 4G connections from next Monday (September 5) on the basis of Aadhar card. All Jio services will be free from September 5, 2016, until December 31, 2016, under Jio Welcome Offer.
He said Jio will lift India to the top 10 in the world in terms of broadband penetration compared to 155 ranks now. “We Indians have been known for Gandhi giri..now we can do data giri,” Ambani said.
Unveiling the tariff plan, he said customers would have to pay for one service – either voice or data. Adding that voice calls would be free, he said there would be no roaming charges for domestic use. He said data plans would be cheaper by one tenth – that is Rs. 50 per GB.
In other words, the effective rate would be 5 paise per MB. The more data you use, the lower the rate, Mukesh Ambani told RIL shareholders at the AGM. “This will make India the highest quality, lowest data rates in the world.”
“Most incumbent networks have not built for data. They have had to retrofit to deal with data as an afterthought,” Ambani said. ” They act like language translator. With Jio, digital mother tongue will be IP in natural form.”
Ambani announced that Jio apps bouquet, worth Rs. 15,000, would be available free up to December 2017. He said RJio has launched new 4G phones under LYf brands at Rs. 2,999.
He told shareholders that tariff plans have been kept simple with only 10 plans. Monthly plans include Rs. 149 for 0.3 GB, Rs. 999 for 10GB and Rs. 4,999 for 75 GB. There is also a Rs. 19 pack which gives 0.1GB. There is unlimited 4G access at night on these plans. A special student plan gives 25 per cent more data. All plans include unlimited 4G at night with an option to schedule downloads at night. There won’t be blackout days or extra charges on festival days, and there will be constant access to bills. “We have provided lowest 4G rates in the world,” he said.
Anticipating the challenge, a few days ago, Bharti Airtel has slashed 4G and 3G mobile internet charges by up to 80 per cent to as low as Rs. 51 per GB under a special scheme. To avail of this benefit, Airtel customers are required to recharge with Rs. 1,498 against which they will get 1GB of 4G or 3G mobile internet usage valid for 28 days, the company said in a statement.
On exhausting the 1GB data limit, customers can get 1GB 4G or 3G recharges for just Rs. 51 over a period of 12 months and there would be no limit on the number of recharges during the period.
Idea and RCom have also been preparing for this competition. How will they respond is yet to be seen.