MUMBAI: Mukesh Ambani, India’s richest man and primary shareholder of Reliance Industries Limited (RIL), announced the launch of his mobile service network ‘Reliance Jio’ on Monday.The launch was accompanied by a full-page newspaper advertisement showing Indian Prime Minister Narendra Modi endorsing the brand, dressed in Jio’s Navy and white colours.The network will offer customers three months of free services which will be followed by free calls over 4G and economical data plans which will under-cut market rates. The prices for 4G data packages may be as low as Indian Rs50 per GB.
Ambani claims his cheap data service, perhaps the cheapest ones anywhere in the world will bring tens of millions of Indians online.Data mining could be the next major investment for the family business which was founded in 1965 by Ambani’s father. “Data is the new oil, and intelligent data is the new petrol,” the Mumbai-based tycoon told Reuters in March.
The Indian mobile market recently hit 1 billion phone users and there are expectations that the number of internet users will also double in the next four years, hitting 730m.There is fierce competition among telecom industries to capture the biggest share of this lucrative industry.Jio’s arrival has sparked a price war as its rivals struggle to match up to the promises made by the retailer.Bharti Airtel, the country’s largest phone network, has cut its data prices in recent weeks, whereas Vodafone, India’s second largest network, has argued its cheapest data plans offer better rates than Jio’s.
Reliance Phone retailers are seeing a massive surge in customers as people flock to register for their Jio plan and enjoy three months of free service.Jio, which is offering seven different phone plans, is not expected to turn a profit for around five years.Critics are wary of the quality of service and coverage the network will provide. It only offers 4G service which will mean it cannot cover areas of the country which only have access to 3G or 2G infrastructure.
Furthermore, it remains to be seen how they will cope with the massive number of registrations which could reach as high as 40m subscribers by the end of the financial year, according to Morgan Stanley analyses.