Indiaâs richest businessman launched an ambitious new cellphone service Thursday, offering free callingÂ and one of the cheapest data plansÂ in the world â setting the stage for a predatory price war in the nationâs booming telecom industry.
Analysts called the long-awaited launch a âparadigm shiftâ and âgame changerâ in Indiaâs telecommunications sector.
Addressing the annual shareholder meeting of his company Reliance Industries in Mumbai, the billionaire oil and gas magnate,Â Mukesh Ambani,Â said his new service, called Jio, will âtransform India from a high-priced data market to one with the lowest rates anywhere in the world.â
âThe era of paying for voice calls is ending,â Ambani, 59, announced amid loud applause, unveiling what could be Indiaâs largest 4G network covering nearly 90 percent of the country. “Customers should pay for only one service, voice or data, not both.â
Ambaniâs 45-minute speech was aired live on all television channels. Some called it Indiaâs âSteve Jobsâ moment.
The new service will charge about 75 cents per gigabyte of data, which is one-fourth of what competing companies charge today.
âThe supply of oxygen for digital life must never be unaffordable for any user,â Ambani said.
Competitor Bharti Airtel’s shares dropped 8 percen,t and Idea Cellular’s fell by 9 percent on the Bombay Stock Exchange. Together, the two companies lost $1.8 billion in market capitalization.
In the past month, Bharti Airtel cut prices of its data services twice, anticipating Jioâs launch.
The news portal Scroll.in said: âMukesh Ambani wants to become Indiaâs data king by sparking a telecom bloodbath.â
Ambaniâs company already owns the largest fiber optic network in India, along with television channels, news portals, hardware and entertainment content.
The network covers 18,000 cities and towns and more thanÂ 200,000 villages. By March, the service is likely to cover 90 percent of Indiaâs population. Ambani lives with his family in an extravagant billion-dollar, 27-floor home in Mumbai, Indiaâs financial capital.
India is the second-largest mobile phone market in the world, with nearly 1 billion people entering the wireless communication revolution in the past decade.
But the rapid rise in cellphone users coupled with a slow infrastructure has resulted in sloppy service in recent years âÂ a painful but common phenomenon known as âcall drops.â
Ambani said that his venture will embolden Prime Minister Narendra Modiâs pet project called Digital India: an $18 billion plan to connect Indiaâs cities and villages to the Internet with a combination of broadband connectivity andÂ WiFi. Today, most of Indiaâs 350 million Internet users access the Web on their mobile devices.
There was a wave of excitement among Indians on Twitter.
Reliance Jio will transform India, give every Indian huge data capacity,create 1 virtual nation,disrupt incumbents who give lousy service RT
â Mohandas Pai (@TVMohandasPai) September 1, 2016
â Rimpal Chawla (@rimpalchawla) September 1, 2016
â SUHEL SETH (@suhelseth) September 1, 2016
â Ankur Bhardwaj (@Bhayankur) September 1, 2016
May now see a telecom pricing war in India. Big beneficiaries will be consumers. And those of us who are in the digital content business!
â Vikram Chandra (@vikramchandra) September 1, 2016