What’s with all the Reliance Jio hype?

Mukesh Ambani is Santa Claus and he’s got some incredible gifts

WrittenBy:NL Team
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It might be an exaggeration to say that the launch of Reliance Jio was the most awaited event since the Second Coming, but on the day, Reliance Industries Limited (RIL) Chairman Mukesh Ambani surely could have been mistaken for Christ himself. The hype and the hysteria all reached a crescendo today when Ambani unveiled Jio at the company’s Annual General Meeting (AGM). However, it was free voice calls, no roaming and low-cost 4G data that Ambani was distributing, instead of the paltry bread and fish that Jesus had to offer. But if you’re one of those who have so far managed to escape the media blitzkrieg around Jio, here’s a quick rundown of what it’s all about.

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What is Reliance Jio?

Reliance Jio is a mobile network offering 4G internet services which Ambani contends will cover 90 per cent of India’s population by March, 2017. Ambani has set a target of “100 million customers for the Jio network”, of which it is estimated that it has already acquired 2.5 million users thanks to the preview offer.

In his speech at the AGM, Ambani mentioned that one of the factors that differentiate Jio from other telecom providers, is that unlike legacy networks which “evolved around voice and SMS”, Jio “is built on the language of the Internet”. Ambani also claimed that Jio is the only network in India that is purely 4G and is also “future proof”, meaning that the technology can be easily upgraded to 5G, 6G and beyond.

What’s the hype all about?

Much of the attention directed towards Jio is because of the seemingly irresistible mobile plans that it is offering. At the launch, Ambani revealed that voice calls will be free of cost on the Jio network, forever. As if that was not enough, he also announced that Jio is doing away with national roaming.

Coming to data plans, Jio is providing what Ambani reckons are “the lowest data rates anywhere in the world”. Starting from Rs 149, Jio has plans up to Rs 4,999, offering data from 0.3 GB to 75 GB, in addition to providing unlimited 4G data at night. At the highest slabs, the rates could be as low as Rs 50 per GB.

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Moreover, till December 31, 2016, customers will be able to enjoy a ‘free welcome offer’, which means free data services for the next four months.

What’s up with the competition?

Understandably, Jio’s hyper-aggressive pricing has spread panic among other telecom providers. Even as Ambani was speaking at the AGM, stock prices of rivals Airtel and Idea took a hit – shares of both companies fell 6.4 per cent and 8.3 per cent, respectively.

Additionally, rival telcos, through the Cellular Operators Body of India (COAI), have protested with the Department of Telecom (DoT) and the Telecom Regulatory Authority of India (TRAI) in relation to termination charges, also called interconnect usage charge (IUC). IUC is paid by the operator on whose network the call is made, to the operator of the network on which the call is received. Jio’s competitors have complained that they aren’t being duly compensated in terms of IUC, especially considering the massive volumes they have to deal with due to Jio’s free services.

While emphasising that “RIL is a valued member of our association”, Ranjan Mathews, Director General of COAI, told Newslaundry that the dispute could be resolved in two ways. “One, RIL and the incumbent operators can mutually come to a bilateral agreement,” he said. “The quicker route would be for TRAI or DoT to say we have adequate data and evidence to take a call, and then take it.”

What’s at stake?

With the media going gaga over Jio’s lucrative bouquet of services, it seems Jio is destined to be a smash hit. However, it could run into problems if the tussle with its rivals continues. Because of the dispute, other telecom providers are not sharing their networks with Jio, which means a lot of calls get dropped. In fact, the call drop rate on Jio stands at 65 per cent.

It would also be wise to remember that Reliance’s ventures into the consumer space haven’t always performed spectacularly. Reliance’s forays into retail (Reliance Trends, Reliance Fresh) haven’t exactly taken the world by storm, have they?

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