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
Why Reliance JIO’s new tariff plan is BAD for Bharti Airtel, Idea & Vodafone Airtel's stock performance (2002-2017)The stock of Bharti Airtel is at a two-year high, not far from its life-highs of late 2007, but going by the latest tariffs unveiled by Reliance Jio, investors will do well to hold off on the bubbly for a while longer.Airtel closed a...
The Economics of Bharti Airtel’s 7777 offer on the iPhone 8 Bharti Airtel announced that it will sell high-end smartphones online with instant financing.The phones, including the iPhone 8, will be available at low downpayment and bundled monthly packages, which will make them more or less free of charge.The model was first tried ...
Bharti Airtel merges Ghana arm with Tigo of Millicom Bharti Airtel said it is merging its operations in the African nation of Ghana with the local unit of Millicom International Cellular."Under the joint agreement, Airtel and Millicom will have equal ownership (50:50) and governance rights in the combined entity, which will ha...
Reliance Jio’s New 4G Plans: No More Tariff Increases? Jio's new 4G tariff from Oct 19Reliance Jio has unveiled a set of new plans that will come into effect from tomorrow, effecting a price increase of about 15% to existing tariff.The phrasing of the new plans also suggests that these are 'regular' plans, and not promotiona...
Reliance Jio to withdraw Rs 399 plan next week Most customers of Reliance Jio, the country's largest telecom operator by volumes, will not be able to get the 84GB-for-399 plan starting next month, the company's deputy chief financial officer V Srikant said on Friday.Asked how the company's average revenue per user (billi...
Surprisingly, Reliance Jio is already profitable at PAT level Reliance Jio has reported revenue of Rs 7,213 cr, including GST, and an operating profit of Rs 261 cr for the second quarter of the financial year.However, after deducting costs related to the wear and tear of its machines, Reliance Jio reported a pretax loss of 414 cr. This...
Reliance Jio breaks even on opg level, 9.62 GB avg consumption per month Reliance Jio has reported revenue of Rs 7,213 cr and an operating profit of Rs 261 cr for the second quarter of the financial year.Per capita data consumption was 9.62 GB per user per month.Average voice consumption was 626 minutes per month during the period, it added. ...
Tata Tele acquisition good for Bharti Airtel – Fitch Bharti Airtel Limited's (BBB-/Stable) announcement that it plans to acquire the consumer mobile operations of Tata Teleservices and Tata Teleservices (Maharashtra) Ltd (Tata Telecom business) is positive for the deal participants as well as the industry, Fitch Ratings said.B...
Reliance, Essar triple petrol outlets in 2 yr, continue to expand fast – India Ratings Private players such as Reliance Industries and Essar -- owned by Russia's Rosneft -- have tripled the number of petrol and diesel outlets in India in the last two years, and could double their market share by implementing their ongoing expansion plans, India Ratings said.Fro...
Reliance Jio quarterly numbers to be announced today; new tariff plans eyed Reliance Industries, the parent of telecom operator Jio, will announce its quarterly performance numbers at around 5 pm today.Besides its core oil and gas business, the company will give an update on the operations of its telecom unit.Some in the market even expect it t...
Tata Teleservices to merge mobile business with Bharti Airtel Bharti Airtel Limited, India’s largest telecommunications services provider and Tata, India’s leading conglomerate, today announced that they have entered into an understanding to merge Consumer Mobile Businesses (CMB) of TTSL and TTML into Bharti Airtel.The move is likely ...
Reliance Jio to launch new plans on Thursday, offers 100% cashback Reliance Jio, India's most popular wireless data provider, said it will introduce new plans from Oct 19, and that it was offering "100%" cashback on its popular recharge of Rs 399 that gives three months of services.In a promotion put up on its website, the company said the ...
Airtel counters JioPhone with smartphone at Rs 1,399 net price Bharti Airtel has announced a scheme to offer a 4-inch smartphone at an effective price of Rs 1,399 -- after cash backs -- to take on the challenge posed by Reliance Jio's Jiophone.The customer needs to make a down payment of Rs 2899 for the 4G smartphone. He will get a cash...
Tata Tele Maharasthra loses 3.5% mobile subscribers in Sept Tata Teleservices Maharashtra Ltd has lost 3.5% of its mobile subscribers in September.The company, which offers mobile and wired telecom services in Maharashtra, Mumbai and Goa saw its mobile users fall to 69.8 lakh (6.98 mln) on September 30 from 72.4 lakh at the end of Au...
Idea, Airtel offer 84 GB 4g data for Rs 400 to target users Airtel PlansIdea Cellular and Bharti Airtel are offering 1 GB of 3G or 4G data per day for 84 days at a price of around Rs 400 in select circles, including voice benefits, matching Jio's lowest tariff.The offer is available only for targeted users.For example, for so...
To arrest subscriber decline, Idea offers 84 GB, on-net calls for 230 rupees Idea Cellular, the third largest telecom operator in India by revenue, has started offering new customers 84 GB and free on-net calls for 84 days for just Rs 230 in the Kerala circle.Similar schemes are likely to have been launched in other circles as well.It also offers ...
Reliance Industries sells Marcellus shale assets for $126 mln Reliance Industries said it had signed agreements to sell all of its interest in certain upstream assets in north-eastern and central Pennsylvania, known as Marcellus shale.The assets, which are currently operated by Carrizo Oil & Gas, Inc., were sold to BKV Chelsea, LLC...
Reliance Industries sells Marcellus shale assets for $126 mln Reliance Industries said it had signed agreements to sell all of its interest in certain upstream assets in north-eastern and central Pennsylvania, known as Marcellus shale.The assets, which are currently operated by Carrizo Oil & Gas, Inc., were sold to BKV Chelsea, LLC, an...
Idea Cellular offers 28 GB 3G/4G data for Rs 250 Idea Cellular, which has been under pressure in recent months due to aggressive offerings from rivals Bharti Airtel and Reliance Jio, has unveiled a new promotional offer that gives 1 GB per day for 28 days at a price of around Rs 250.Unlike other plans, this one does not off...
RCom likely to shut more 2G, 3G networks, sell the spectrum Reliance Communications, which announced it was abandoning plans to merge with Aircel Cellular, indicated that it would focus on two segments - 4G and wired. Within wired, it would focus on enterprise services.The disclosure indicates that the company, -- which recently shut ...