Reliance winds back price war threats

15 Apr 2016

Reliance Jio Infocomm (RJIL) is backing down on earlier claims that it would offer low-cost 4G products, shifting focus to service quality rather than pricing. The cellco’s chief product and innovation officer Rainer Deutschmann was quoted by the Economic Times as saying: ‘We are not saying we will lower the price, but we will create a better experience. People are willing to pay for connectivity, but don’t like to pay if they don’t get an experience.’ The official added that prices in India are ‘already at such a low level’ compared to other markets. Whilst Mr Deutschmann’s comments go some way to assuaging fears of an imminent price war, they are in stark contrast to previous claims from the cellco’s owner Mukesh Ambani that RJIL would offer data and voice services at half the price – or lower – than existing market rates. Since those claims were made, however, RJIL has pushed back its launch date several times, giving incumbents such as Bharti Airtel, Vodafone and Idea Cellular breathing room to not only improve their networks but also begin inching down data prices, leaving the newcomer less room to undercut them on cost.