Mobile services Services

Jio network launch sparks Delhi chaos and boardroom panic

After repeated delays, Reliance Jio has finally launched its hugely anticipated offering of free voice calls over its 4G-only network in India. The interruptions temporarily gifted other players some breathing space, but this aggressive move to shift the Indian market towards data-only mobile plans will throw up some real problems for incumbent telco Bharti Airtel and second placed Vodafone India, which both still pull in the majority of profits from voice and text.

Jio, part of Reliance Industries, will initially be offering voice and data free to new customers, until the end of the year when data caps will be introduced. It has already launched millions of smartphones through its Reliance Lyf handset subsidiary, and has invested more than $20bn in its network. Jio owns the largest chunk of Indian spectrum, and that’s before next month’s mega spectrum auction.

The disruptive telco looks set to grab itself some market share right from the off, as Indian news outlets have been reporting on the chaos that has ensued at Reliance Digital retail shops across the country – something that the stores were apparently hugely underprepared for despite the country-wide buzz in the run up to launch.

Jio will also be enticing in new customers with free bundled subscriptions to its suite of apps, including Jio Play, Jio Chat, Jio News and Jio Moneyetc (e-payment) – apps that can only exclusively be accessed over Jio’s own 4G network. Jio Play offers 300 live TV channels and a selection of on-demand movies and music.

Jio has a series of ten tarrifs, starting at Rs 19 ($0.30) for 100 MB, right up to Rs 4,999 ($75) for 75 GB, voice calls are free for all tariffs – it claims to offer the lowest data rates worldwide at a remarkable Rs 50 ($0.75) per GB. All plans also offer unlimited 4G LTE data between the hours of 2am and 5am.

Jio has also adopted an ‘un-carrier’ model which we have seen stir up controversy in the US with T-Mobile’s Binge On service – so when Jio customers have hit their 4G data caps, data used after this will be throttled down to 128Kbps to avoid subscribers being hit with overage charges.

Shares of Bharti Airtel and Idea Cellular have slipped 11% following Jio’s launch, but despite this, some financial analysts believe the disruption will just be provisional as the big players will return fire with their own competitively priced multiplay offerings. Anonymous executives from both companies have already expressed that introducing free voice is something they will surely have to do to remain competitive. “The industry will have to accept the reality, and free voice is one such reality,” said the anonymous Airtel executive.

Don’t blink or you might miss the next chapter in the saga of Indian consolidation this year. Vodafone India is the frontrunner to acquire Telenor’s Indian subsidiary which would boost its spectrum capacity and 4G coverage – putting it in a better position to deliver high value service services to improve ARPU and compete with Jio and Bharti Airtel.

This period of consolidation may even see the extinction of small operators over the coming year. Reliance Communications has already snapped SSTL and Bharti Airtel nabbed Augere.

VPS hosting