At a meeting of shareholders of the Reliance India Limited on July 21, Mukesh Ambani revealed the latest big push from the Reliance Jio Infocomm into the billion strong telecom base in India – the 4G enabled Jio phones that would be sold at a price tag that is almost free. After last year’s experiments with free connectivity and 4G data through the Jio SIMs, this latest new venture has turned the market upside down yet again apparently.
At an annual general meeting(AGM) that traditionally focusses on oil and gas, petrochemicals, refining and marketing, Mukesh Ambani revealed plans to sell an LTE smartphone for Rs.153 a month – the cost of data it would carry, in addition to a security deposit of Rs.1500 that would be refundable after the three years in a measure to protect against misuse. To be sure, the unlimited data has been capped to half a GB per day to evenly distribute demand, but the phone will also have optional TV streaming that will let the phone be plugged into any TV, not just the smart ones.
The smartphone has all the standard features, some of which were showcased by Ambani’s children Akash and Isha, both of whom are on the Jio team. The team stressed that the Jio phone was targeted to the nearly 500 million mobile users in India who did not use the data services on the 3G and 4G networks because they could not afford a smartphone. The Jio phone is intended to operated on the data-strong 4G LTE network that would provide high speed data and good coverage.
By the end of the evening, predictably, Reliance shares were up by 3.76% at Rs1,586.20 on BSE, while those of its larger rivals Bharti Airtel Ltd and Idea Cellular Ltd were down 2.05% and 3.11%, respectively. On Monday, 24 July, the next trading day, Reliance shares closed at an all-time high of Rs1,616.10 on BSE. The launch of the subsidized smartphone has spooked the telecom industry again, although the success of the Jio phone is still a big question mark.