RJIL kicks off price war but warns of foul play

1 Sep 2016

4G startup Reliance Jio Infocomm (RJIL), the mobile arm of petrochemical giant Reliance Industries Ltd (RIL), has thrown down the gauntlet to the incumbent cellcos ahead of its full commercial launch on Monday 5 September, announcing that its tariffs will include free voice services and charge a base rate of INR50 (USD0.74) per GB for 4G data. The Economic Times quotes RIL Chairman Mukesh Ambani as saying in a speech yesterday that ‘all voice calls for Jio customers will be absolutely free,’ adding that roaming charges would also be zero. The move marks a return to RJIL’s original strategy of maximising disruption in the market at launch to steal market share from the incumbents after the cellco distanced itself from such plans earlier this year. At launch, the executive said, Jio will offer ten plans at a range of price points, from INR19 for an occasional data user, with monthly plans ranging from INR149 to INR4,999. In addition to offering free voice services, all of the tariffs allow customers free unlimited access to Jio’s applications and all but one of the cellco’s monthly tariffs include unlimited SMS and unlimited data at night. Looking to lower the barrier to entry, meanwhile, RJIL will offer LTE-compatible handsets from INR2,999. In terms coverage, the operator currently covers 18,000 cities and 200,000 villages and RJIL plans to cover 90% of the population by March 2017.

Mr Ambani also urged the incumbent operators ‘not to misuse their market power by creating unfair hurdles’, and accused the entrenched providers of providing Jio with insufficient points of interconnection (PoIs). ‘In the last week alone, Jio customers suffered over 50 million call failures to other networks because of insufficient interconnect capacity’, the official explained, adding that: ‘The incumbent operators have a legal obligation to provide PoIs.’ The lack of adequate PoIs led to a call drop rate of 65% for Jio customers, forcing it to delay its commercial launch, the operator claims, but the incumbents have responded by accusing RJIL of running commercial services under the guise of running trials. As such, they will not provide further interconnect capacity until RJIL launches commercially.

India, Reliance Jio Infocomm (Jio)