Taking the current price war and competition in India's telecom space to a new level, Reliance Industries Chairman Mukesh Ambani on Thursday announced that domestic phone calls from the Jio network will be free forever, and unveiled a four-month introductory offer for everyone of a zero-tariff voice and data services, beginning on September 5."The era of paying for voice calls is ending," Ambani told the 42nd Annual General Meeting of the company at an overcrowded Birla Matoshree Auditorium here. "No Jio customer will ever have to pay for voice calls again," he added, devoting around an hour of his 90-minute speech to Jio -- which he named 169 times.In effect, the announcements on Thursday point to a commercial launch from January 1 next year even though no specific mention was made in this regard. This was also keenly awaited since Reliance Industries has invested as much as $21 billion on Jio -- its largest ever capital expenditure on a single project.
The Chairman said the data plans will also reflect the affordability for customers, with an effective base rate of 5 paise per MB or Rs 50 per GB. "Jio will have a base rate which is more than 90 per cent discount over the industry," he said.He said based on the usage, the data tariff could go to as low as Rs 25 per GB -- and in a format which common people can understand. He said the free domestic voice calls will also come with free roaming while international ones too will be affordable."We Indians have come to appreciate and applaud Gandhigiri. Now, we can all do 'Data-giri', which is an opportunity for every Indian to do unlimited good things with unlimited data."The announcements came against the backdrop of a series of discounts and freebies offered by existing layers like Airtel, Vodafone and Idea during the past month, ostensibly to ensure customers stay with them, even after the commercial launch of Jio.Reacting to the Jio plan, Bharti Airtel said: "We welcome Reliance Jio's entry to the digital world and wish them the very best. We also welcome Jio's call to leading operators to work together. As a responsible operator we will fulfill all our regulatory obligations as we have always done."
During the speech, Mukesh Ambani also appealed to incumbent operators not to block Jio calls and ensure adequate points of interconnect. "In the last week alone, Jio customers suffered over five crore call failures to other networks because of insufficient interconnect capacity provided by incumbents."
Experts now expect a shakeout and a push in the data market."Reliance Jio may look to disrupt some of the prominent geographies of existing operators, leading to a re-distribution of the market share which is concentrated among the top three operators, in 2016-17," said Tanu Sharma, Associate Director with India Ratings and Research, a Fitch Group company."For a price-sensitive market like India, launch of affordable data services and free voice calls is indeed a welcome step. This is expected to drive greater data adoption across segments," noted Prashant Singhal, Global Telecommunication Leader, Ernst and Young.
Other highlights of Mukesh Ambani's speech:
- Students will be able to get 25 per cent more data on Jio's main tariffs
- A target of 100 million customers in the near future
- Data usage of 250 core GB a month
- The Jio bouquet of apps free will end next calendar year
- Coverage of Jio to extend to 90 per cent of population by March 2017
- A range of 4G enabled smart devices
- Free Jio apps worth Rs 15,000 annually free till December 31, 2017
- Jio digital fund of Rs 5,000 crore to incubate start-ups
- Jio already largest 100 per cent 4G network in the world