The Indian telecoms giant, Reliance, is offering smartphone users what it says is the cheapest mobile data network in the world. The arrival of Jio – the new mobile network – has ramped up the battle among Indian telecoms firms to win customers.
High-speed 4G internet is by no means new to the country, but Jio is offering it at prices well below its rivals. The company says it hopes to reach 90% of India’s population within a year. The ambitious plan is backed by the country’s largest private sector firm, Reliance Industries. Chairman Mukesh Ambani recently used the firm’s annual general meeting to announce his plans for Jio’s 4G services. It has taken them six years to set up the infrastructure for Jio.
Analysts say Jio is likely to make India’s telecoms sector extremely competitive.
As soon as Mr Ambani unveiled his plans, the share price of India’s biggest telecom company, Bharti Airtel, fell 8.5% – losing $1.3bn (£975m), Idea Cellular’s market value also dipped by 7%, wiping more than $500m of its value. Even Reliance’s own stock witnessed a dip of 3%.
Jio’s cheapest plans begin at just over $2 a month. Initially, all users will get data, voice, video and a host of applications and content for free until next year.
But some analysts have expressed concern at Jio’s price war.
Reliance is entering the market at a time when the telecom industry has a combined debt of over $50bn. The price war means Indian mobile users should be the winners.