Gold Silver Reports — Mukesh Ambani Ushers in a Telecom Revolution with Jio — Mukesh Ambani announced the long-awaited official launch of Reliance Jio Infocomm’s services next week, outlining a strategy that promises to transform India’s telecom business by offering free voice calls and mobile internet at a fifth of current rates along with a wide range of entertainment options underscoring the theme of convergence.
“The era of paying for voice calls is ending,“ Ambani said. “No Jio customer will ever have to pay for voice calls again.“ The unveiling sent the stocks of phone companies tumbling, wiping out investor wealth of ` . 13,000 crore as Ambani spoke at the Reliance Industries Ltd annual general meeting in Mumbai.No. 1 Bharti Airtel, third-ranked Idea Cellular and Reliance Communications fell by 6.4%, 10.5% and 8.8%, respectively, on the Bombay Stock Exchange on fears that they would have to either match Jio or risk losing users. Shares of Reliance Industries fell 2.7% to . 1,029.15 on a day the benchmark in` dex ended flat.
The official launch will take place on September 5 with free voice and data services till the end of the year for all users. The company is hoping that free calls, free national roaming and cheaper Internet access will help it rapidly ramp up to 100 million users. That compares with nearly 256 million users for market leader Bharti Airtel. Users of other networks can switch to Jio from September 5 using mobile number portability (MNP).
GSM industry body Cellular Operators Association of India (COAI) said it doesn’t see too many users switching and that maintaining service quality will be a challenge.
COAI Director General Rajan Mathews said the claim of free calls is not entirely correct as the tariffs bundle data and voice. Jio denied this, saying calling will be totally free and no data will be deducted on account of calls.
Ambani took direct aim at the incumbents, saying their legacy networks were not built for data and had been upgraded as an afterthought, rendering them inefficient. Jio’s has been built for data and hence offers better quality of service, he said. — Neal Bhai Reports