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Reliance Jio: Mukesh Ambani unleashes price and speed war in telecom

Nevin John     September 1, 2016

Flexing the financial muscle of Reliance Industries (RIL), the largest private company in India by revenues (Rs 2.3 lakh crore), Chairman Mukesh Ambani announced the launch offer of Reliance Jio - free voice, zero roaming charges, and Rs 50 for a one-GB data plan - at the company's 42nd AGM. 

Jio will be launched on September 5.


The announcement sent shockwaves through the telecom industry as the main rival Bharti Airtel's shares slipped by 11 per cent to Rs 298.70 in the morning trade. Idea Cellular fell nearly 10 per cent to Rs 84.50 even as BSE Sensex was marginally up.

Ambani claimed that the base 4G LTE data rate on Jio will be one-tenth of other players - at Rs 50 per GB. At present, about 70 per cent of the revenues of incumbents in telecom come from voice calls. So Jio's free voice move will force others to lower voice charges, leading to big drop in their margins.

Jio will begin offering full bouquet of its services to everybody without restrictions from September 5 to December 31, 2016. The commercial launch is likely to take place on December 31.


Also, Jio will offer unlimited LTE data at night. There will be 10 4G LTE data plans to choose. The peak download speed will be 135 mpbs on the Jio network. Airtel has started offering the same speed in Mumbai and Kerala circles. Roaming charges for Jio will be 'zero' within India. Under a special discount scheme, students will get 25 per cent more data. Jio's apps bouquet will be available for free till December 31, 2017. 

The data tariff plans will start from Rs 149 for 0.3 GB to Rs 4,999 for 75 GB. All data plans, except for the 0.3 GB plan.

"These are the simplest and the most attractive tariff plans in the market, with the lowest data rates anywhere in the world," Ambani said.

Jio will launch 4G-enabled smartphones at Rs 2,999 under its LYF brand. Jio network is 5G and 6G ready, said Ambani.

"Jio will put an end to voice call charges in India. No Jio customer will ever have to pay for voice calls again," Ambani said during the AGM.

India is 155th in the world for mobile broadband access; Jio will take the country to the top 10. Jio has created an all-IP network. ''There is only one language spoken on the Jio network. We will have a single digital mother tongue. The all-IP design also makes Jio's network the most expansive and future-proof network in the country'' said Ambani. ''Jio is a data strong network built for the Internet from the ground up. By March 2017, we will cover 90 per cent of India's population. It is the first mobile network that is only 4G LTE.''

The onboarding process will now be 100 per cent digital, using Aadhaar-based e-KYC, starting today from Mumbai and Delhi. With instant e-KYC, customers will be able to walk out with an operational connection within 15 minutes. 

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