Will Ambani announce Reliance Jio tariffs, MNP launch on Thursday?

mukesh-ambaniWith only three more days to go before Reliance Industries chairman Mukesh Ambani makes his once-in-a-year speech to his shareholders, there is strong expectations that Reliance Jio — the group’s telecom arm — will make its commercial launch date and other details public on the day.

Ambani typically uses Reliance Industries’ annual general meeting (AGM) to lay out a clear roadmap of all the different projects that the group has ongoing, and this time, the focus will largely be on Jio.

India’s richest man will also a point to prove as he arguably failed to deliver on his last AGM promise to make 2016-17 the first full year of commercial operations. To deliver on his promise to shareholders last year, Reliance Jio would have had to start selling its connections at least on Apr 1 this year.

However, it started selling connections — that too under a bundled offer — around May 5 — late by a month. The sales have since been expanded to include practically everyone with a 4G handset in India.

However, Jio has been forced to ramp services an carefully graded fashion to avoid stressing the network or its sales and distribution network.

Instead of starting SIM card sales all at once, it staggered the sales of new SIMs by opening it up to users of a particular brand of smartphones on a particular week.

This was done to avoid overwhelming Jio’s user verification and activation department, and to ensure that activation deadlines are met. (However, despite this, users are facing big delays in getting activation done.)


Due to the staggered introduction of services, the term ‘commercial launch’ has more or less lost its meaning as the only service remaining to be opened up is mobile number portability.

However, the ability to offer MNP is not as crucial today as it used to be — particularly for a data-oriented operator.

Since nearly all 4G models today come with dual-SIM slots, people are using Jio’s SIM in the second slot even while continuing to attend calls on their regular number on the same handset.

Besides MNP date, the only substantial thing left for Mukesh Ambani to reveal during the AGM speech will be details of Jio’s 4G tariff plans. Though he is unlikely to go into details in his speech, he is likely to reveal the exact date of Jio’s commercial launch and shed some light on pricing.


The company’s tariff structure is the most crucial piece of information that the market, the consumers and the shareholders are waiting for.

Unless Jio prices its data at least 40% cheaper than competitors like Bharti Airtel, Vodafone and Idea Cellular, it will be difficult for the company to continue to attract new consumers at the rate it is currently doing.

If for example, Jio’s tariffs are only 30% cheaper than those of the incumbents; the others will almost immediately cut their data prices to the same level.

While the Mukesh Ambani firm will generate some goodwill from consumers for driving down prices, such a development will significantly impact the customer acquisition speed of the new operator by denying its biggest USP — higher efficiency resulting in lower prices.

On the other hand, if Jio’s prices are 50% below those of the others, the competitors may be forced to think twice before cutting their data prices.

Besides, data pricing is not the only place Ambani can hit the others.

A crucial part of the emerging competitive scenario will be how Jio prices voice calls.

According to market speculation, Jio’s likely to offer call tariffs of around 25 paise per minute.

In comparison, the average call tariff of Bharti Airtel, Idea Cellular and Vodafone is about 55-60 paise per second. Most of their customers actually pay in the range of 60-72 paise per minute and keep their conversations short.

Voice is where the incumbents are likely to be hit hardest as this segment contributes 70-75% of their revenue and profit.

If the incumbents are forced to cut their call rates to 25 paise per minute,  these companies — which have less efficient, older networks — will be pushed into losses.

As such, they are likely to do only modest cuts, and could offer rates between 35-45 paise per minute.

However, they also enjoy a crucial technological edge when it comes to voice — their networks support 2G, 3G and 4G handsets, while Jio only supports 4G handsets as of now.

Still, being forced to do a 20 paise cut would severely, though not mortally, wound these companies.

In their most lucrative circles — which they dominate — their call rates are about 60 paise per minute.

Out of this 60 paise, 30-40 paise currently go towards their operating profit, and it is this profit that will be hit hard by any reduction in call rates.

To make things worse, if the profitability reduces — or if they are pushed into losses — these companies won’t be able to generate the funds required for making new investments into 4G.

At present, the big three operators have only a fraction of the 4G capacity that Jio has.

Though they have additional 3G capacity to compete with Jio, they must still spend thousands of crores of rupees to simply catch up to Jio’s wireless data capability today.

Besides Jio’s rivals, another group of people who will be anxiously waiting for the company to announce its tariffs will be the consumers.

Since the shuttering of RCom’s CDMA service, it will be for the first time that these consumers will have a pan-India service that offers call rates of 30 paise per minute.

Though operators like Aircel and Tata DoCoMo do offer calls at the rate of 25-30 paise to heavy users, these networks cannot provide the ubiquitous network coverage that Airtel, Vodafone or Idea can.

Jio, however, is not expected to have any problems in coverage because of its use of 850 MHz spectrum. The GSM services of Aircel and Tata DoCoMo run on 1800 MHz spectrum, which has poorer propagation characteristics.

A single tower using 850 MHz spectrum is equivalent to several towers of 1800 MHz spectrum in terms of coverage.

As such, Jio’s 1.5 lakh towers should give enough coverage to rival that of the incumbents like Airtel and Vodafone, and offer a significantly superior coverage compared to other low-cost GSM operators like RCom, Aircel and Tata DoCoMo.

This should spell a bonanza for customers who can look forward to a steep corrections in both data and voice prices if Jio announces cheap tariffs.

On the other hand, the possibility of the Mukesh Ambani firm surprising the market and offering call and data rates in line with what the incumbents offer can also not be totally ruled out.

However, the chances of that happening are very very slim right now. Jio has a target of attracting 10 cr customers within the first year, and technically, its first year has already started.

It is therefore no wonder that crores of telecom subscribers, as well as thousands of telecom investors, will be holding their breath when Mukesh Ambani takes the podium at Reliance Industries’ 42nd annual general meeting this Thursday.


Reliance Jio watch out! Airtel offers shocking 4G price of Rs 51/GB

[socialpoll id=”2384041″]

Vodafone halves 4G data prices: 4 GB at 255 | 22 GB for 999 Vodafone has halved data prices, six months after cutting them by about 40%.Under the new 4G tariff announced today, customers will get 4 GB of data for Rs 250 and 22 GB for Rs 999.These are roughly half of the prevailing data rates in the market.The current data price in the market is 2 GB for Rs 250 and 10 GB for Rs 999.Vodafone is also off...
1GB LIMIT: Reliance Jio starts restoring full speed at end of day Reliance Jio, India's largest provider of wireless data, has modified its bandwidth limitation policy to restore full speed for the subscriber under its Happy New Year offer the next day.So far, a 4G subscriber who crossed the daily FUP limit of 4GB or 1GB had to wait for exactly 24 hours for Jio to lift the speed limits.Under the new policy, he ...
Airtel doubles 3G speed in Delhi with more spectrum Bharti Airtel, India's top telecom provider, introduced its second 3G carrier in Delhi, more than doubling the speed of the existing network for most smartphones.Not only has the company introduced a second 'carrier' (block of spectrum) adjacent to the first one, it has also implemented the technology to merge the two blocks into one, thus boosting downl...
BSNL to start 4G services only after April – CMD Bharat Sanchar Nigam Ltd, the state-owned telecom services provider, will start its 4G services only in the next financial year that starts in April."BSNL is likely to start 4G services in 2017-18," Anupam Shrivastava, the chairman and managing director of the company said.The company has fallen far behind all its rivals in putting up 4G networks e...
BSNL to soon relaunch Rs 498 “truly unlimited” 3G plan, new packs on Republic Day State-owned Bharat Sanchar Nigam Ltd has decided to "relaunch" its 14-day "truly unlimited" 3G plan, chairman and managing director Anupam Shrivastava said today.The plan, introduced in early December, was pulled after only one month. It offered truly unlimited 3G data usage at just Rs 498 with a validity of 14 days.The 498 recharge was one of th...
Idea Cellular increases free data in unlimited scheme by 4 times Idea Cellular today increased the free data allocation on its existing unlimited calling packs.Compared to 1 GB of 4G data that customers were getting with the Rs 348 pack, they will now get 4 GB.Similarly, the free data allocation for those who do not have 4G handsets has been increased from 50 MB to 3 GB per month -- an increase of 60 times. ...
Bharti Airtel to launch pan-India Payments Bank tomorrow Bharti Airtel, India's largest telecom company, will take a crucial step towards entering the financial services business as it launches its Payments Bank operation across India tomorrow.Payments Bank refers to a limited operations bank that can be primarily used for making transactions, and not for depositing money.The operator has already start...
SUPERHOUR: The SECRET behind Vodafone’s Rs 16 offer It is no secret that India's second biggest telecom operator by revenue -- Vodafone -- is under threat from a rapidly growing No 3 -- Idea Cellular -- and an aggressive newcomer -- Reliance Jio.Though Idea is still behind the British firm when it comes to total revenue, Idea has already overtaken Vodafone as far as the data business is concerned, acc...
Vodafone 4G reaches UP West; Goa, Chennai, Punjab next Vodafone has launched its 4G network in UP West and Uttarakhand offering "4 times" as much data for a 1GB pack.Among the first wave of cities are Dehradun, Haridwar, Aligarh, Nainital and nine other prominent business, tourism and educational hubs."4G services will soon be available across several other major towns across the circle by March 2017...
Bharti Airtel offers 3GB of 4G data free per month for one year, with conditions Bharti Airtel, which has come up with various 'free data' schemes of late, has kicked off one more such scheme -- offering 3 GB of free data per month for those availing certain handpicked recharge and billing schemes.For prepaid users, the free data is available if they recharge Rs 345 per month. The Rs 345 recharge also gives free unlimited voice calls...
TRAI wants FREE DATA for everyone, without ‘gatekeeping’ by telcos India's telecom regulator has suggested that every rural citizen should be given 100 MB or so per month on a free basis to help the spread of digital revolution in the country. It has also suggested allowing 'third party aggregators' like Facebook to offer free data, but only if they can keep telecom companies totally out of such efforts.Both suggestions...
Bharti Airtel completes pan-India 4G with Assam; offers 10 GB for Rs 249 Bharti Airtel launche its 4G services in Assam, starting with Dibrugarh and Tinsukia. "With this, customers in Dibrugarh and Tinsukia can now enjoy high speed mobile broadband on Airtel 4G and get on to the digital superhighway to enjoy uninterrupted HD video streaming, superfast uploading and downloading of movies, music and images," the company said. ...
Fitch downgrades Anil Ambani’s Reliance Communications over Aircel merger Fitch Ratings has downgraded India-based Reliance Communications Limited's long-term rating to 'B+' from 'BB-'."It is our view that Rcom's plans to demerge its wireless business into a 50:50 joint-venture and sell 51% of its tower business, Reliance Infratel Ltd (Infratel), will be negative for Rcom's creditors, even if receipts from the tower transactio...
Bharti Airtel boosts talk-time on recharges by up to 30% Airtel now offers Rs 220 talktime on Rs 200Bharti Airtel, India's largest telecom company, has started giving 'more than full' talktime on easy recharges that can be done from any vendor.The lowest such denomination of Rs 200, which will now give Rs 220 in terms of talk time, according to dealers.Earlier, a recharge of Rs 200 would have given a ...
CRASH: Bharti Airtel offers 6 GB at Rs 147 per month Hit by competition from Reliance Jio, Bharti Airtel, India's largest telecom company, is offering a whopping 6 GB of 4G data for Rs 147 with a validity of 28 days.The offer is being rolled out only to prepaid users, and can be seen only in the 'only for you' deals section of Airtel's recharge app or website. As it is a targeted offer, it may not be ava...