Mobile services

Jio Piles Further Pressure Onto Indian Old Guard

India's newest service provider, Reliance Jio, continues to make fierce enemies of the country's other telcos, today announcing new tariff schemes that will maintain the pressure on its rivals and revealing that its customer base has reached 100 million since its launch in September last year.

During a set of announcements today, Mukesh Ambani, the owner of Reliance Industries, Reliance Jio's parent company, said that while Reliance Jio would not extend its free tariff offers it is launching what it calls the Jio Prime Membership program, which will include all of the Jio subscribers who join the network by March 31 this year. Members will be able to enjoy unlimited voice and data services until the end of March 2018 after paying a one-off fee of 99 Indian rupees ($1.5) and a monthly subscription of INR303 ($4.5).

Ambani also said that Jio will increase its data capacity to provide enhanced services. "We will more than double our data capacity which means better service experience for our customers … we are making the network faster and stronger," he said. The plan is to ensure that Jio's network covers 99% of the country's population by the end of this year.

What will further add to the problems of the other telcos is that Jio is also promising to match the cheapest data plan in the market while providing 20% more data. "It is Jio's solemn promise to offer better value for the best price," says Ambani.

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India's established service providers have for weeks been complaining about Jio's free voice and data offerings. But with the launch of Jio Prime Membership, their situation seems likely to get worse. All of the main operators recorded a drop in their revenues and profits during recently quarterly earnings updates, and Jio's latest moves will make the going even tougher.

This was reflected in stock movements immediately following Jio's announcement. The share price of Bharti Airtel Ltd. (Mumbai: BHARTIARTL), India's biggest operator, closed down 3.38% in Mumbai, at INR362.95 ($5.4).

Jio's market entry has already been a catalyst for consolidation in India and there could be more to come. Vodafone India , the country's number two player, recently announced that it was in talks with Idea Cellular Ltd. , the number three, about a possible merger, and there are reports that a deal could be reached as soon as this week. (See War of Words Escalates Between India's Jio & Airtel.)

— Gagandeep Kaur, contributing editor, special to Light Reading

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