Indian tycoon launches low-cost mobile phone network. A price war could be next. – Washington Post

India’s richest businessman launched an ambitious new cellphone service Thursday, offering free calling and one of the cheapest data plans in the world — setting the stage for a predatory price war in the nation’s booming telecom industry.

Analysts called the long-awaited launch a “paradigm shift” and “game changer” in India’s telecommunications sector.

Addressing the annual shareholder meeting of his company Reliance Industries in Mumbai, the billionaire oil and gas magnate, Mukesh Ambani, said his new service, called Jio, will “transform India from a high-priced data market to one with the lowest rates anywhere in the world.”

“The era of paying for voice calls is ending,” Ambani, 59, announced amid loud applause, unveiling what could be India’s largest 4G network covering nearly 90 percent of the country. “Customers should pay for only one service, voice or data, not both.”

Ambani’s 45-minute speech was aired live on all television channels. Some called it India’s “Steve Jobs” moment.

The new service will charge about 75 cents per gigabyte of data, which is one-fourth of what competing companies charge today.

“The supply of oxygen for digital life must never be unaffordable for any user,” 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 Jio’s launch.

The news portal said: “Mukesh Ambani wants to become India’s data king by sparking a telecom bloodbath.”

Ambani’s 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 than 200,000 villages. By March, the service is likely to cover 90 percent of India’s population. Ambani lives with his family in an extravagant billion-dollar, 27-floor home in Mumbai, India’s 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 — a painful but common phenomenon known as “call drops.”

Ambani said that his venture will embolden Prime Minister Narendra Modi’s pet project called Digital India: an $18 billion plan to connect India’s cities and villages to the Internet with a combination of broadband connectivity and WiFi. Today, most of India’s 350 million Internet users access the Web on their mobile devices.

There was a wave of excitement among Indians on Twitter.


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