India’s telecommunications market is about to undergo a major disruption.
On September 1, 2016, billionaire Mukesh Ambani, announced that one of his companies, Reliance Jio Infocomm Limited, will offer the world’s lowest rates for 4G internet data, as well as free mobile phone calls, putting pressure on existing carriers to follow suit or prepare to give up a significant portion of their market share. Mr. Ambani is India’s richest man and chairman of one of the country’s largest and most profitable conglomerates, Reliance Industries Limited.
“The era for paying for voice calls is ending,” Mr. Ambani proclaimed during Reliance Industries’ annual general meeting in Mumbai. Jio Infocomm’s new service, which will be on a modern 1,800 MHz band, is expected to significantly speed up the internet on mobile phones, and will be free to users until the end of December, 2016. Thereafter, the company will offer mobile internet data for as little as US$0.7 per gigabyte (GB). One GB of data, from Jio Infocomm’s competitors, costs around 5 times as much.¹
While the number of mobile phone subscribers in India surpassed 1 billion users this year, according to the country’s telecom regulator, there are currently only around 125 million smartphone users – compared to over 500 million in China.² Indicating that the US$50 billion industry has room for further growth and could also be a boon for other sectors such as e-commerce, IT and even healthcare services in India.¹
¹Quartz, India’s richest man unleashes a long-awaited disruption in the country’s $50 billion telecom sector, September 1, 2016.
² Forbes, India Just Crossed 1 Billion Mobile Subscribers Milestone And The Excitement's Just Beginning, January 6, 2016.