Taking a cue from other consumer-facing brands, Reliance Industries has decided to provide live streaming of Mukesh Ambani’s much expected speech at the company’s annual general meeting on Thursday.
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Besides matters related to the company’s core oil and gas and retailing operations, the billionaire is expected to go into some detail on his plans for his biggest dream of all — Reliance Jio, which has already become India’s biggest operator by data capacity.
Though a ‘soft launch’ of the Jio network was unveiled late last year on the occasion of RIL founder Dhirubhai Ambani’s birth anniversary, the company has started really opening up its service to the public at large only in recent weeks.
The operator has, on its part, come under pressure from both its rivals and reportedly even from the government to reveal its cards as far as its plans for the telecom arm are concerned.
The company has already signed up an estimated 4-6 million subscribers under a trial operation that it calls ‘Preview Offer’.
The offer has been wildly popular for two reasons: One – it offers unlimited 4G data and voice for 90 days to anyone who has a 4G phone, and two – Jio has promised the public at large that its services will be ‘substantially cheaper’ than those of its competitors after the trial is over.
The dual attraction — that of the 90-day preview offer coupled with the promise of cheap voice and data in the future — has proven irresistible to most 4G phone users in India.
Little surprise, therefore, that Reliance’s retail outlets have been witnessing snake-like queues of people holding 4G handsets and waiting to get their hands on ‘free’ 4G connections with unlimited data and voice for 90 days.
Yet, all this is threatening to be nothing short of a disaster for Jio’s main competitors – Idea Cellular, Vodafone and Bharti Airtel.
These operators currently charge around Rs 220 for 1 GB of wireless data, something Jio is giving away for free, and about 70 paise for one minute of voice call.
Jio’s preview offer — which comes with zero costs — has handicapped these operators by not giving them the chance to match the new company’s tariffs. The operators, who were expecting Jio to price its 1 GB pack at around Rs 100, are ready to do match its tariff, but are quite helpless in front of a zero-price offer.
As such, they have been pressurizing the government to crack down upon the company’s free offer, giving various reasons such as legality of trial services, loss of revenue to the government and predatory pricing.
While the rivals want Jio to wind up its preview offer and publish its ‘real’ tariffs; according to industry information, the Ambani firm is ready to budge only on the second demand — that of publishing its tariff plans.
As such, the billionaire’s speech at the AGM is anxiously awaited by everyone, including the public and the competitors, as it is almost certain that he will unveil his plans for the telecom venture and its pricing strategy.
Meanwhile, unscrupulous elements have already started taking advantage of the expectation. While some are claiming that Jio is launching a phone for Rs 199, others are circulating images that show impossibly cheap data tariffs, claiming them to be genuine leaks from the company.
On a realistic note, the company is expected to offer data, voice and entertainment combinations that will be ‘too good to resist’. Jio has already built up a big repository of audio and video content, which it plans to deliver using its LTE network.
However, the company could run into some issues with India’s strong net neutrality activists if it tries to give preferential treatment to audio and video services operated by it compared to those operated by third-party providers like Google-owned Youtube and Star TV’s Hotstar. It has largely escaped scrutiny so far due to its trial status.
It also remains to be seen how much data traffic the new 4G network can actually take. At present, Jio has managed to maintain its wireless data bandwidth largely unchanged despite adding millions of users in the last one month, suggesting that the company may indeed be able to scale up its network without running into serious quality of service issues.
Jio also has laid fiber optic cables in many areas where it can easily install more wireless towers in case of congestion. Ambani has stated that the company’s network can support 10 GB of data usage per subscriber per month without compromising on user experience.
In comparison, rival networks report less than 1 GB of data usage per month per data user.
Jio’s menacing moves have already led to counter moves in the market by competitors, particularly by the player that stands to lose the most from Jio’s success — the current No.1 Bharti Airtel.
Barely a month after slashing its data prices by about 35%, the telco again slashed them to unprecedented levels earlier this week.
Under the new offer, Airtel will provide 4G and 3G data at just Rs 51 per GB for one year to those who make a one-time recharge of Rs 1,450 or so.
The move is akin to Jio’s strategy of trying to retain users by getting them to invest a substantial amount upfront and then giving them cheap data and voice offers later on.
However, while Airtel has the spectrum and network to take on Jio by matching prices, the other two rivals — Idea Cellular and Vodafone — have not been able to follow suit for a simple reason — they do not have the required spectrum to take on Jio in a price war.
Besides, they are waiting to see exactly what the Ambani firm is going to offer in terms of pricing, and then decide their counter strategy. Not surprisingly, therefore, officials at these companies’ headquarters will have their volumes turned up high as Ambani makes his plans public.
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