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

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″]

Follow ULTRA.news
TV18 posts 8% top line growth, regional news slips Reliance Industries' controlled TV18 reported better results than in recent quarters, and said advertising revenue is showing signs of recovery. The company reported a 8% growth in the top line for Oct-Dec quarter to Rs 271 cr, while profit before tax remained flat at Rs 16 c...
Why no Jiocoin can ever take on Bitcoin Every few months, there is a new rumor surrounding Reliance Jio, the 4G operator that has taken the country by storm. A year ago, it was Jio DTH, which was supposed to put other DTH operators out of business, and now, it's Jiocoin, which is supposed to put virtual currencies l...
Idea-Vodafone merger gets NCLT approval The proposed merger between Idea Cellular and Vodafone got the approval of India's National Company Law Tribunal, with the rider that the merged entity will be liable to pay income tax on behalf of Vodafone India in case of a ruling that Vodafone India has to pay the arrears. ...
Reliance Jio crosses 15 cr subscriber mark; Idea, Vodafone back to growth Subscriber additions in Nov 2017 The Telecom Regulator's subscriber addition numbers for November showed that new operator Reliance Jio continued to lead the charts in terms of net subscriber addition, but rivals like Idea Cellular and Vodafone too have come back on the growt...
Reliance Jio unveils 3GB, 5GB daily packs at Rs 509, 799 New Plans After disrupting the market with its 1GB per day plans, Reliance Jio has unveiled new packs targeted at heavy users. Two new plans have been unveiled today that were not present on the company's website earlier -- a 3GB per day plan priced at Rs 509 and a 5GB dai...
Tata DoCoMo offers 1GB daily + free calls at Rs 179 with Airtel 3G Tata DoCoMo, which recently announced that it was moving its customers to Bharti Airtel's network before a merger of the two companies, has started offering unlimited calls and daily data. Even though users won't be able to latch on to Bharti Airtel's 4G network, they can use ...
Reliance Jio unveils 8 new plans, data price falls 32% Reliance Jio has unveiled eight new plans that have brought down the price of 4G data by 32% to Rs 3.56 per GB from Rs 5.19 per GB earlier. The new plans are available from Tuesday and will make most of the the company's existing plans irrelevant (see table below). The new ...
Jio Impact: 4G overtakes 2G in network size in India A single tower often hosts multiple tenants Reliance Jio, the telecom arm of Reliance Industries, has achieved what was considered impossible barely 18 months ago: India now has more 4G base stations than 2G base stations. In other words, 4G service providers in India have...
Vodafone offers Rs 1,500 cashback on Samsung Galaxy J series Galaxy J7 Max Vodafone announced cashback of Rs 1,500 on Samsung handsets Galaxy J2 Pro, Galaxy J7 Nxt and Galaxy J7 Max. Vodafone customers, both existing and new, can purchase any of the popular Samsung 4G smartphones, it said. To avail this special offer, prepaid cus...
Aditya Birla Group to invest Rs 3,250 cr into Idea before merger An Idea promotion Idea Cellular said its board of directors have approved the issuance of 32.66 cr shares of the company to its promoter Aditya Birla Group at a price of Rs 99.50 each. The total infusion will be to the extent of Rs 3,250 cr. It also said it plans to rai...
L&T gets Rs 2,100 cr projects from RIL, HPCL HPCL tankers at a refinery L&T said its Hydrocarbon Engineering unit secured a major construction contract for Crude Distillation and Vacuum Distillation Unit (CDU & VDU) from Hindustan Petroleum Corporation Limited, Visakhapatnam Refinery. It also won an extension...
TRAI: India data price rises 22% in Q3; 4G accounts for 80% of data use When Mukesh Ambani launched his telecom venture a year ago, it was based on one key assumption: India is a data starved country, and given the right pricing, demand for the commodity is almost insatiable. Going by the latest industry data from the Telecom Regulatory Authority ...
RCom confirms sale of telecom assets to Reliance Jio An RCom exhibition stall Reliance Jio, the firm led by Mukesh Ambani, will walk away with most of the telecom assets of Reliance Communications, led by Mukesh's brother Anil. Rcom said it has "signed definitive binding agreements with Reliance Jio Infocomm Limited for sale...
Inter-ministerial group on telecom woes dismissed crisis theory, blamed telcos for high debt The problem of high debt levels faced by some telecom companies in India was of their own making and the government had a limited to role to play in resolving the same, the inter-ministerial group set up to address the concerns of telecom sector found. The cash flow issues fa...
BSNL 4G is coming to villages, not towns BSNL Chairman Anupam Shrivastava has officially confirmed what had only been hinted at so far, the company will indeed launch 4G services starting with Kerala next month. However, in all the buzz, one key element of the plan was overlooked -- it is going to use Band 1, also k...
Govt committed to concept of net neutrality – Manoj Sinha TRAI Chairman RS Sharma Telecom minister Manoj Sinha today said the government is committed to the "the fundamental principles and concept of net neutrality" and is studying the recommendations of the telecom regulator in this regard. The government is keen to ensure "non-...
BSNL posts lower loss, debt in FY17; Revival plan under preparation State-owned Bharat Sanchar Nigam Ltd, which had been seeing a steady recovery in its financial condition in the last three years, found it difficult to keep the recovery going in FY17. According to the latest data given by the Department of Telecom, the company reported a net...
Anil Ambani announces the end of Reliance Mobile Anil Ambani, who warned about the possibility of the emergence of a 'monopoly' in Indian telecom three months ago, today said he was hanging up on his consumer telecom business. Ambani, younger brother to Mukesh Ambani -- the chairman of Reliance Industries -- said the mobile...
Airtel, Idea & Vodafone to unveil 1GB/day pack at Rs 199 With Reliance Jio unveiling its first monthly tariff plans, all eyes are now on the incumbents -- Bharti Airtel, Idea Cellular and Vodafone -- to see how they will respond. Industry sources believe that the three operators will unveil a new 199 plan which gives 1 GB of data per d...
Reliance Jio launches monthly plans 199 & 299 with 1.2 & 2 GB per day As expected, Reliance Jio has launched its first monthly plans -- Rs 199 for 1.2 GB per day and Rs 299 for 2 GB per day. The plans were anticipated after the newcomer unveiled its permanent plans on Diwali -- more than a month ago. The plans price data at roughly the same ...