Jio bytes hard, bridges digital divide with free calls, free data

Mukesh Ambani seeks to revolutionalise telecom across country

In a path-breaking move that is likely to wipe out all competition, Mukesh Ambani on Friday announced the launch of Jio Phone, a 4G feature phone that offers free calls along with data packs at extremely low prices. Unlimited data packs for JioPhones will start at Rs 153 per month — there are also weekly and 2-day packs.

Soon after the announcement, shares of rivals Bharti Airtel Ltd and Idea Cellular Ltd plunged.

Ambani, who had taken the telecom sector by surprise with free voice calls and data last year, announced the next leap at the company’s 40th shareholder meeting.

The phone, targeted at 50 crore feature phone users in the country, will be available for pre-booking from August 24 on payment of a security deposit of Rs 1,500. This deposit will be refunded after 36 months on return of the phone, Amabni said, adding that the price of the phone will be “effectively zero”.

Mukesh Amabni used the occasion to introduce his twin children, Akash and Isha, who presented the phone features that include calls and text messaging on voice command, Internet surfing and cable to connect the device to TV to view content, including videos.

“JioPhone will make the 2G feature phone obsolete,” Ambani claimed, adding that the company is looking to bring 5 million phones to the market a week.

“Reliance democratised the equity culture in the past. Now, Jio will democratise the digital culture in India,” he asserted, adding, “Digital life will no longer be the privilege of the affluent few.”

Jio, Ambani said, already has 125 million users since its launch in September last year. In just six months of launch, data consumption in India has gone up six-fold to 1.2 billion GB per month, making India the largest mobile data consumer in the world, Ambani claimed.

This is “protection from extortionist data charges”, Ambani said referring to his rivals in the mobile sector.

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Telecom regulator Trai on Friday said the industry has reached a consensus that there is no need for a floor price for telecom services as of now. Telecom Regulatory Authority of India Chairman R S Sharma said he met representatives of all service providers today and arrived at a consensus that fixing the floor price "is not a workable idea". “The consensus is that as of now, we don't need to pursue the idea of a floor price. We had detailed discussions for over two hours today. There will be no further discussion or consultation on the issue," he added. Trai met operators after a section of incumbent telecom companies demanded fixation of a minimum floor price for data and voice calls. If a minimum floor price had been set, it could have meant an end to freebies in the market.

The tariffs are currently under forbearance -- operators virtually have a free hand in fixing the rates and report tariff plans to Trai in 7 days of launch -- and, hence, a floor price setting would have implied a shift from that regime.

"Consensus at the end of the meeting was that there is no need to pursue the idea and it has been collectively decided not to forego the principle of forbearance," Sharma said.

During the meeting, Idea Cellular is learnt to have batted for fixation of a minimum floor price through a one- hour presentation, while newcomer Reliance Jio termed the proposal as a regressive and anti-competitive step.