New Delhi, Sep 3: To usher in an age of digital abundance, Reliance Industries Ltd’s (RIL) telecom unit chairman Mukesh Ambani on 1st September launched Reliance Jio 4G SIM service. The unit will start offering services from 5 September and any cell phone user will be able to sample all Jio services for free till December 31. From January 2017, customers will have to pay for data but voice will remain free. This move has however been a major jolt for small telcos like Bharti Airtel, Idea, Vodafone and Telenor.
With unbelievably low price data services and free voice calls for its customers, the launch of Relaince Jio has taken the telecom sector by storm. In wake of expanding the pan-India network, Mukesh Ambani said that Reliance’s 4G LTE network Jio is the biggest startup in the world with US $20 billion investment.(ALSO READ: Reliance Jio 4G Effect: BSNL unveils unlimited wireline broadband plan at Rs 249)
According to Telecom Regulatory Authority of India (TRAI), there are 1 billion mobile subscribers across India and analysts are of the view that over 100 million users will jump to Reliance Jio services in the coming 18 months,creating a major shift in their service providers. Ambani plans to pour money into Jio until it gains major market share and creates a dent in the telecom sector, thus affecting its competitors in the market.(ALSO READ: Reliance Jio free SIM cards being sold in black market like hot cakes: Prices ranging from Rs 500 to Rs 1000)
Reliance Jio offers to transform India’s telco paradigm with its free voice calls, free nationwide roaming and with such low priced data services. “In the medium term, Reliance Jio will ensure the likes of Aircel, Telenor India, Tata Teleservices and RCom will exit,” said a UBS note. “Jio’s big bang entry is likely to ‘expedite exit of weaker operators dependent on cheap voice and not invested in data networks. These (weaker operators) still account for 25% of industry revenue and a likely 35%-40% volume share, given their low pricing”, brokerage BNP Paribas was quoted by Economic Times.(ALSO READ: Reliance Jio needs 75-80 million users in 2-3 years to break even: Analysts)
According to reports, Deutsche Bank said weaker players with constrained financials will not be able to replicate Jio’s aggressive offers, and hence would eventually cede revenue-share to the new 4G entrant. “It expects the telecom arm of Reliance Industries to corner 10% revenue share of the mobile market in five year”, the Bank stated.
“This move will wake up the industry and the consumer is going to benefit from all this. Consumption will grow and more Indians will get jobs and get added to the middle class,” says Mohandas Pai, MD of Aarin Capital. According to reports, Airtel dominates subscriber base with 265 million users, followed by Vodafone with 185 million subscribers. Taking the data services into consideration, ninety-five percent of India works on 2G services and Jio’s aggressive offerings will attract these customers as it offers free voice calls and data services at unbelievably low price.
To make smart phones available at low prices, Reliance has left no stone unturned to target audience. The company, after the launch of Reliance Jio also announced new 4G smartphones starting at Rs 2,999 under its Lyf brand. There is no denying that Reliance Jio launch has placed India on the global map for mobile broadband Internet access. Competing telcos like Bharti Airtel Ltd, Vodafone India Ltd, Idea Cellular Ltd and others are however, under immense pressure to retain their customers.