India's mobile-telephony companies are headed for a fresh round of price wars after the country's richest man said his carrier, Reliance Jio Infocomm, will charge its subscribers from April 1, but at sharply discounted rates.After six months of offering all services for free, a plan that helped Reliance Jio net 100 million subscribers in a record time, chairman Mukesh Ambani on Tuesday said that Reliance Jio would not levy fees on calls.
For the next financial year beginning April 1, the company's existing users and those coming on board this March will continue to get 1 GB of data a day and all of Reliance Jio's apps for Rs 303 a month and a one-time cost Rs 99.
By contrast, market leader Bharti Airtel offers unlimited calls and 1 GB of 4G data at Rs 345 for 28 days. Airtel also offers 30GB of data for 90 days at Rs 1,495. For Rs 349, Bharti's nearest rival Vodafone offers unlimited calls and 50 MB of 3G or 1GB of 4G data, also for 28 days.
Reliance Jio on Tuesday said those who join as subscribers after March 31 will pay according to subscription plans that range from Rs 149 to Rs 4,999.
"Data is the oxygen of digital life and it is our promise that Jio will provide world-class quality and quantity of data, at prices that are affordable to all Indians," Ambani said in a speech shown live on Reliance Industries' social media accounts.Reliance Industries is the carrier's parent company.
The start of paid services from Reliance Jio comes amidst a bitter industry spat - now before various legal fora - with incumbent companies accusing the new entrant of violating rules by offering voice for free and not charging customers beyond the mandated 90-day period.
Mukesh Ambani's company has denied the allegations, saying all its plans have been cleared by the telecom regulator.
"These announcements mean continuation of the price war.Incumbents who would have assumed significant return of subscribers or increased usage of data on their network post March 31, may find it (the assumption) thwarted," said Amresh Nandan, research director for Gartner.
Ambani said the raft of com peting offers by rivals had confused users. "These plans have created a lot of confusion in the market... and customers are having what I call data and value anxiety... whether they are getting the best value for the price that they are paying," he said.
Hence, Reliance Jio would monitor all announced plans."And we will not only match the highest selling tariffs of each of the other leading Indian telecom operators... but we will provide 20% more data in each of these plans," he said.
Experts say Reliance Jio is seeking to lock in users at Rs 303 a month, and is s targeting the bigger data subscribers who spend at least Rs 700 a month at rivals. A research analyst at an international brokerage firm said that Idea, Vodafone and Bharti Airtel could see their high-end subscribers port to Reliance Jio.
"About 70% of revenues come from 30% of the customers.They could now shift to the Rs 303 monthly plan and get all the benefits," said the analyst, who did not want to be named.
After Jio's announcement, shares of market leader Bharti Airtel closed at Rs 360.55, down 4.02%, while Idea Cellular closed at Rs108.30, down 0.37%, off intraday lows of 106.65, on the BSE.
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