NEW DELHI— Mukesh Ambani, India s richest man, on Thursday outlined his plans to shake up the country s telecommunications industry through his new cellular company, which aims to steal customers from the competition and bring millions of Indians online for the first time by offering data at unprecedented rates.The chairman of Reliance Industries Ltd. EQRELIANCE -0.90 % , told its annual general meeting that its wireless phone unit, Reliance Jio Infocomm Ltd., will undercut its competitors by offering data for 50 rupees 75 cents per gigabyte and monthly plans for as little as 149 rupees $2.23 .The first group of users signing up for the new platform, which launches Monday, will be offered free service until next year, Mr. Ambani said.Life is going digital, Mr. Ambani said, referring to increased usage of smartphone-based services like mobile messaging and phone calls over the internet, noting that his goal was to offer the lowest data rates anywhere in the world.Mr. Ambani said Reliance Jio will provide India s first mobile network running entirely on high-speed standards known as 4G and LTE, or fourth generation and long-term evolution.While Reliance Jio is a latecomer, Mr. Ambani has been laying the groundwork for years for his grand entrance into the highly-competitive market.
Reliance, one of India s largest corporations, is set to change the mobile landscape in the country.It s launched Jio, a new carrier with a nationwide 4G LTE network that promises transfer speeds of up to 135 Mbps, free voice calls and roaming across the country, and, according to the company, lower data rates than any other mobile service in the world.It s also offering 4G-capable handsets that start at Rs.1,999 $30 , along with benefits like student discounts and no extra charges on major holidays a common practice among Indian mobile operators .While free voice calling sounds great, what s especially interesting is the promise of cheap data.149 $2 a month and go up to Rs.
The launch of Reliance Jio s 4G LTE network in India has jolted the telecom market in the country.The impact of Jio s free and unlimited voice calls and cheap data tariffs is not only helping the new entrant win new customers, but is also reflecting on how the market perceives other incumbent carriers.In the aftermath of Jio s nation-wide commercial launch in the country, India s largest telecom operator Airtel is seeing a significant dip in its market value.Bharti Airtel s stocks were down by 6.48 percent at the time of writing this story.Idea, which has over 100 million subscribers took a 10.9 percent hit.Stocks of Tata Communications, another major player in the country, is down by 2.55 percent, whereas Vodafone, which has over 150 million mobile subscribers in India, is observing a drop of 1.87 percent on the London Stock Exchange.
View photosHttps%3a%2f%2fblueprint-api-production.s3.amazonaws.com%2fuploads%2fcard%2fimage%2f301219%2fhttps 3a 2f 2fblueprint-api-production.s3.amazonaws.com 2fuploads 2fcard 2fimage 2f238566 2fhttps 3a 2f 2fblueprint-api-production.s3.amazonaws.com 2fuploads 2fcard 2fimage 2f197328 2freliance jio 12More"Today, India is ranked 155th in the world for mobile broadband Internet access, out of 230 countries.I have no doubt that with the launch of Jio, India s rank will go up to among the top ten.1.2 billion Indians cannot be left behind as the world enters a new era."With these words, India's richest man Mukesh Ambani commercially launched Jio, the world's first 4G LTE only network.Fast forward three months later, Jio already claims to have more than 50 million subscribers, adding nearly half-a-million subscribers every day or over 400 subscribers every minute.
The telecom operator owned by India s richest man continues to win over half-a-million subscribers each day.The 4G LTE-only Reliance Jio from India s largest industrial house Reliance Industries Limited RIL has revealed it has over 72.4 million subscribers on its network.The feat comes just four months after the service was launched to the public.The company said it is seeing over 600,000 subscribers join its network every day, at a pace that it claims surpasses the likes of Facebook, WhatsApp and Skype.Though the milestone falls short of company s own expectations RIL s Mukesh Ambani had hoped to see 100 million subscribers by the end of 2016 , Reliance Jio s ability to get 72 million subscribers will worry incumbent players.India's oldest private carrier, Airtel, has 260 million subscribers, for instance.
India s largest operator, Bharti Airtel, is to acquire the Indian mobile business of Norwegian carrier Telenor, in an apparent move to counter the impact of disruptive pricing by new entrant Reliance Jio Infocomm.The deal is the latest among carriers aiming to consolidate their operations in India.Vodafone Group confirmed recently that it was in talks with Indian operator Idea Cellular for a merger, while earlier Reliance Communications entered into an agreement in September to merge its wireless business with Aircel, a smaller mobile operator.The consolidation could help users as larger companies will be able to use spectrum more efficiently and invest in new technologies quickly, according to analysts.A unit of the large Reliance Industries with deep pockets, Jio upset the plans of entrenched rivals by offering 4G services free for close to six months, garnering 100 million customers in the bargain.The company, which plans to start charging from April 1, has indicated it will continue to undercut its rivals.
Reliance Jio has extended the deadline for its latest subscription plan for an additional two weeks, as well as introducing another three month freebie offer for new customers.While there has been little reaction at the time of writing, the move is hardly going to be welcomed by competitors, who have questioned the legitimacy of the length of the deal, and whether there is preferential treatment of the newcomer.Following the decision to extend the freebie offer in December, the market old-timers raised objections, arguing the extension was contrary to competition laws, though these objections have been shot down by the Telecom Regulatory Authority of India (TRAI).The objection here is built around the idea that business cannot intentionally run continuous loss making promotions, as it would unfairly impact competition and sustainability in the market long-term.Should one be sceptical, one could argue Jio’s ‘promotional’ offer is primarily driven with the ambition of harming competitors as opposed to enhanced its own position.Though this does not seem to be the opinion of TRAI, which seems to view Jio as the golden child who can do no wrong, as it continues to apparently green-light extensions for the ‘promotional’ freebies.
Bharti Airtel has accused Reliance Jio of directly ignoring an order from the Telecom Regulatory Authority of India (TRAI), and continuing its ‘Summer Surprise’ discounts for customers.Only a couple of days after Jio announced it was extending its free services offer, albeit under a different name, TRAI finally said enough is enough, forcing Jio to actually start charging its customers.Although free services were a welcome break for the general population in India, the established players in the telco market cried foul play, leaning on competition and market sustainability arguments to end the Jio rampage.Jio has confirmed it has heard and understand the ruling, and is in the process of withdrawing the offer as soon as “operationally feasible”, but this doesn’t would not appear to be fast enough for moody Bharti Airtel, who has thrown yet another temper tantrum.“We are surprised that Reliance Jio is openly continuing with its Summer Special offer despite the same being declared ab initio void by the TRAI,” said a Bharti Airtel spokesperson to the Economic Times.“In addition, Reliance Jio is running an aggressive campaign via social media and on ground as well as digital flyers encouraging customers and channel partners to subscribe and recharge under the scheme.”
RCS, otherwise known as Rich Communication Services, is an emerging standard which aims to replace SMS and allows consumers to communicate with the rich media they’ve come to expect from OTT apps such as WhatsApp, Facebook Messenger, and Skype.The deployment of RCS to Reliance Jio’s customers is part of the ‘Jio4GVoice’ service and surpassed 100 million subscribers within 170 days.This rapid uptake created a world record to reach this milestone; growing faster than any of the aforementioned popular OTT apps.We are excited by the ambition and pace of the Jio evolutionJio4GVoice is a downloadable app from the Google Play Store and does not require an LTE device to be used.After obtaining a Jio SIM, subscribers only have to download the app to benefit from high-quality calls in addition to RCS’ enhanced messaging features such as group chat, file transfer, location share, and stickers.
p Following the aggressive plans offered by Reliance Jio, Aircel is now trying to leverage the demand for low cost data packs by announcing a new 1GB 3G data pack for just Rs 76.It’s important to specify that the network will only offer 3G data for the customers and not 4G.This pack will have a validity of only 10 days, though, so you will effectively get 3GB of data for Rs 228 per month.Aircel is also offering 100MB of additional data for every recharge over Rs 50.There’s another 100MB of data up for grabs if you download the Aircel app from the Google Play Store or the iTunes App Store.The carrier also announced free incoming calls while on national roaming across its networks, so the carrier has been in the news for quite some time now.
p Indian mobile super-disruptor Reliance Jio continues to out-pace its rivals in terms of customer acquisition to become the fourth-largest domestic MNO.The six million subscribers added in March, according to the Indian telecoms regulator TRAI, actually represent a slow-down for rampant Jio.On the back of the time-honoured customer acquisition tactic of offering stuff for free, Jio sprinted to 100 million subscribers from a standing start in just 170 days – an average gain of around 17 million per month.Having said that it still outstrips all competitors by a considerable margin, with Bharti Airtel managing half that and then Idea, BSNL and Vodafone the only other operators to manage any growth at all.Since the overall market only grew by six million in March, quite a few others experienced significant subscriber losses in the months, headed by Reliance, which is merging with Aircel amid the rush to consolidate.Jio took the fourth spot from the largest state-owned player BSNL (Bharat Sanchar Nigam Limited), while even when their merger is complete Reliance/Aircell is in danger of falling behind Jio if current trends continue.
Ever since the launch of Reliance Jio, Airtel has been losing on many metrics.However, the recent analysis by Goldman Sachs revealed that Airtel is back on track to retain its lost glory.In April, India's leading telecom operator Bharti Airtel was able to add more active users than its rival Reliance Jio for the first time since the launch of Jio in September 2016.Analyzing visitor location register (VLR), brokerage firm Goldman Sachs stated that Airtel racked up 2.6 million active users to its mobile network compared to 400,000 adds by Jio.According to Goldman Sachs, customer's penchant towards incumbent players who cut their profit margins to pass on benefits to customers is on rising after Jio went commercial this MarchThe brokerage firm predicted tough months ahead for Reliance Jio citing that 400,000 active (VLR) subscriber additions in April showcase "its fourth straight month of deceleration."
A merger designed to take on the competitive threat of Jio seems to have been undone by the competitive threat of Jio.Indian operator Reliance Communications (not to be confused with Reliance Jio, although the two are owned by competing members of the Ambani family) announced over a year ago that it was going to merge with fellow operator Aircell.The move was presumed to have been catalysed by the disruptive entry into the Indian market of Jio.12 months down the line and Reliance has decided not to follow through, complaining that “Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction.” The inference seems to be that the regulatory deck has been stacked against them, but those shady vested interests are not detailed.In a full page of bullet-points preceding the announcement, Reliance laments “Unlimited free voice offers and irrational pricing by all industry participants have destroyed the profitability of the traditional 2G/3G mobile business.” This seems to be a direct dig at Jio, but the bullets go on to detail a new 4G-focused strategy reliant (excuse the pun) on network and spectrum sharing agreements with none other than Jio itself.Other than the no-brainer move of focusing on 4G Reliance plans to focus on non-mobile B2B services, including overseas opportunities.
The telco has been in a bit of trouble for a while as debts continued to pile up (supposedly in the region of $6.8 billion), and it would seem the attempted acquisition of Aircel could be the final roll of the Reliance Communications dice.Chairman Anil Ambani had promised cash reserves at Aircel would provide a more stable foundation for Reliance Communications, but both parties seemingly got sick of endless delays, abandoning any deal.And the smell of blood has made its way to the noses of the cut-throat competitors; apparently the scavengers can’t even wait for the limping giant to die; the steaks are being carved out already.While Airtel and Vodafone are already tucking in, Jio has been relatively quiet.With one brother on the up and the other finding issues in the telco space, some have might believe Reliance Communications is an acquisition target for Jio.It was after all Jio’s aggressive pricing strategy which was the beginning of all the pain in India.
Reliance Jio is flying high, its quarterly report implies Reliance Communications is dying a slow and painful death.Total revenues for the quarter stood at roughly $407 million, compared to $768 million in the same period for 2016.Reliance Communications also lost $431 million this quarter, compared to a profit of roughly $9 million in 2016.This makes for a company which is in a lot of trouble; when the loss column is larger than the total revenue column, you have to start wondering what the point is.Some might argue the profit didn’t come from a solid market performance, but creative accountants, therefore there was no foundation for the company to mount a defence against an aggressive disruptor.And just to add fuel to the flames, the team has also said it has missed two bond repayments in recent weeks.
Reliance Communications has been suffering recently, but perhaps there will some comfort in the knowledge Aircel has been missing its debt repayments as well.According to Care Ratings, the company missed a debt repayment and has therefore been downgraded.Few will be surprised by the news Aircel is struggling to compete, but the risk of the Indian telecom market getting smaller is becoming quite real.“The company has delayed in repayment of interest on its debt obligations on account of its weak liquidity position as a result of its continuing weak operational performance in the hyper competitive telecom sector,” Care Ratings said in a statement.Aircel has been under pressure in recent months, primarily due to the entrance of Jio and the race to the bottom which has been caused by the disruptive pricing model.Funnily enough, since the introduction of Jio, Aircel has actually increased the number of subscribers it commands, though its share of the market has gone down.
Bharti Airtel is reportedly eyeing up Reliance Communications spectrum assets, which are currently being sold by lenders who are trying to recover Rs45,000cr in debt.According to India Infoline, Bharti is making moves towards the assets, though Reliance Jio are also interested in the assets.RCom has been struggling for some time now, and is rumoured to be shutting down its voice services from next month.Perhaps we are about to see the beginning of a bidding war.It certainly wouldn’t be the first time Jio has turned up and spoilt a Bharti Airtel party.Perhaps we should not be surprised by Bharti Airtel cracking open its wallet and trying to buy its way out of a difficult situation.
The problems at Reliance Communications are starting to become very well known, and it would appear one of its creditors has finally lost faith in the struggling telco.According to the Financial Times, the Indian telco has been hit with an insolvency petition from its largest creditor China Development Bank.It is another heavy blow after a couple of months which has seen it lose market share, revenues plummeting under intense pricing pressure and share price dropping drastically.CEO Anil Ambani is certainly the brother feeling the sharp end of the stick.For those who are not knee-deep in financial terms, an insolvency petition is essentially a creditor asking a court for a winding-up order.Should the petition be successful, the court will place the company into what is called compulsory liquidation.
There are three events which we think demonstrate this ignorance aptly; the growing pile of insolvency petitions at the Reliance Communications, Goldman Sachs trying to cut its exposure at serial spender Altice and BT’s fragile-looking gamble in the sports content space.Unfortunately for Reliance Communications, this $70,000 bill (roughly) isn’t the only financial headache.It shook the market, and Reliance Communications is just one of several telcos which has suffered.BT’s gambling habit comes back to biteCEO Gavin Patterson has led the charge to dominate the sports content world, but according to the FT, BT is scaling back its ambitious position in the sports stakes.At a Morgan Stanley investor conference in Barcelona, Patterson is acknowledging the possibility BT might lose the Premier League rights auction in February, and is putting together a plan B.
Apple admits it puts a speed-limit on older smartphonesWhile some might claim this is not news, it is perhaps the first time the iLeader has admitted to doing something a little dodgy.The slower your phone, the longer between charges, and therefore it is a move which is entirely for the good of the consumer.Getting the iChief to admit it has done something wrong is a monumental achievement, but it would appear this rare instance of humility is starting to bite back.Reliance Communications offered a lifelineReliance Communications has seemingly be circling the drain for a lifetime, but there light be a glimmer of hope for the punch-drunk Indian telco.