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