Bil­lion­aire Am­bani’s new $23 phone slams ri­vals’ stocks

Muscat Daily - - BUSINESS -

Mum­bai, In­dia - The In­dian ty­coon who punched his way into the coun­try’s mo­bile phone in­dus­try by start­ing a car­rier with ‘free voice ser­vices’ took an­other swing at ri­vals, un­veil­ing a cheap fea­ture phone with ac­cess to 4G data. Mean­while, com­peti­tors’ shares plunged.

The wire­less unit of bil­lion­aire Mukesh Am­bani’s re­tail-to-re­fin­ing con­glom­er­ate will of­fer a 4G data-en­abled fea­ture phone for R1,500 (US$23) start­ing Au­gust 15, he told share­hold­ers in Mum­bai on Fri­day. The Re­liance Jio In­fo­comm Ltd hand­set, or JioPhone, will come with tar­iff plans as low as R23 (US$0.36) for two days or R153 (US$2.37) monthly.

Bharti Air­tel Ltd., In­dia’s largest op­er­a­tor, closed two per­cent lower in Mum­bai on Fri­day. Idea Cel­lu­lar Ltd., which has agreed to merge with Voda­fone Group Plc’s lo­cal unit to create the No. 1 car­rier, sank 3.3 per cent. Bharti Air­tel and Idea didn’t im­me­di­ately re­spond to email seek­ing com­ments. Re­liance’s shares ad­vanced 3.7 per cent at R1,585 (US$24.6) in Mum­bai, its high­est value in more than nine years. Re­liance shares have gained 47 per cent this year, com­pared with a 20 per cent rise in the bench­mark S&P BSE Sen­sex.

“Voice will al­ways be free on the JioPhone,” Am­bani said at a share­hold­ers’ meet­ing in Mum­bai. “Jio will give users ac­cess to un­lim­ited data on the JioPhone.” The data ac­cess will start Au­gust 15, he said.

The move by Am­bani, In­dia’s rich­est per­son, opens a new front in a price war that is al­ready prompt­ing con­sol­i­da­tion within a debt-strapped in­dus­try that in­cludes 11 car­ri­ers. Ri­vals have cried foul against Jio’s tac­tics and have blamed widen­ing losses on the new en­trant.

Re­liance will tie up with Tai­wan’s Fox­conn Tech­nol­ogy Co to man­u­fac­ture the JioPhone and may also con­sider work­ing with Wistron Corp, a com­pany of­fi­cial said on Fri­day.

The phone is “ef­fec­tively free,” said Am­bani, be­cause the ini­tial 1,500 ru­pee pay­ment can be re­funded af­ter three years if the phone is re­turned.

Mukesh Am­bani

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