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Ambani's disruptive digital India Jio "datagiri" gameplan

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MUMBAI: The Mukesh Ambani-promoted Reliance Industries Ltd on 1 September unveiled ‘datagiri’ (dominace via data services) coupled with disruptive marketing tactics in classic Reliance style --- all dedicated to Prime Minister Modi’s Digital India dream.

And while Ambani enumerated the many features of Reliance Jio service, the group’s telecoms and value-added services company, for about 45 minutes in a speech at RIL’s AGM here, there was mayhem on the stock markets. Crores of rupees were wiped off in fortunes as share prices of incumbent telcos tumbled. An analysis by a business news paper estimated that many listed telecoms companies, including younger brother Anil Ambani’s Reliance Communications, lost over Rs 11,0000 crore on the markets.

While the stock markets were witnessing a bloodbath, Ambani told his shareholders, “In the journey of time, there comes a few life changing movements. Our Prime Minister Shri Narendra Modi's inspiring vision of a “Digital India” is one such movement. Jio is dedicated to realizing our Prime Minister's vision for 1.2 billion Indians. Jio will give the `power of data’ to each Indian to fulfill every dream and to collectively take India to global digital leadership.”

Sample some facts: free voice call for Jio customers; data at almost 1/10the the price of those prevailing now; no roaming charges; one million Wi-Fi hotspots around the country by middle of next year; 100 per cent VolTe network that allows simultaneous usage of voice and data services; all customers to get freebies of voice calls, data usage and  video streaming totally free 5 September to 31 December, 2016; a 4G network coverage of  18,000 cities and towns & and over 200,000 villages; student discount of 25% on data usage and a promised investment of about US$ 14 billion in the Reliance Jio ecosystem.

“The Jio ecosystem stands tall on five fundamental pillars (of) best quality broadband network with the highest capacity; a world of affordable 4G smartphones and wireless IP devices; compelling applications and content; superior digital service experiences and affordable and simple tariffs,” Ambani said, sending the Indian telecoms consumers, reeling under indifferent services provided by the present from incumbents, into a tizzy and queuing up for a Reliance Jio connection that has plans to cover 90 per cent of India's population y March 2017.

Jio’s suite looks compelling. Apart from a state-of-the-art pan-India digital services business and fixed and wireless broadband connectivity offering superior voice and data services on an all-IP network, Jio will also offer end-to-end solutions that address the entire value chain across various digital services in key domains such as education, healthcare, security, communication, financial services, government-citizen interfaces and entertainment.

According to reports, the company filed its tariff plans with the Telecom Regulatory Authority of India (TRAI) on 1 September 2016.

Reliance Retail Ltd, another subsidiary of RIL, has introduced a slew of affordable 4G LTE smart-phones under the LYF brand, starting at Rs. 2,999. More feature-rich models will be available at progressively higher price-points like Rs. 3,999, Rs. 4999 and so on. The company has also tied up with smart-phone makers like LG, Samsung and Micromax to bundle Jio SIM and other free services.

If all these were not enough, Ambani announced setting-up of the a venture capital fund, where Jio will work on creating Jio Digital Entrepreneurship Hubs in key cities and towns of India. The Jio Digital India Start- up Fund has set aside Rs. 5,000 crore to be invested over the next five years.

“In this era, if you are not digital, and if you don't have globally competitive digital tools and skills, you simply will not survive. You will get disrupted. You will be outcompeted. You will be left behind. You will become irrelevant. India and Indians cannot afford to be left behind. Today, India is ranked 155th in the world for mobile broadband Internet access, out of 230 countries,” Ambani elaborated, adding that Jio services are aimed at bringing India at par with developed telecoms market.

If things work out as planned, then India's broadcast ecosystem can start seeing an even great shift in consumption of video on mobile handsets, smart TVs, and on on-the-go devices.

"Clearly, the data plans could lead to a price war in the segment with others being forced to follow suit," says an industry observer. "All this is good for the consumer as prices will only head further south and the more they do, the more video will be consumed digitally. Which is fabulous for the OTT ecosystem that is currently being nurtured by independents and the broadcast majors."

Jio Welcome Offer

The Jio ‘Welcome Offer’ provides an opportunity to every Indian to learn, try, customise and experience high quality digital services, without paying for the services up to 31 December, 2016 after which the applicable tariffs will apply.

The company also proposes to use this time period to fine-tune its services and resolving interconnection issues with incumbent players.

"In the last month alone, Jio customers suffered over 5 crore (50 million) call failures to other networks because of insufficient interconnect capacity," Ambani said hinting at the all-out war being played out with incumbents accusing Reliance of not playing fair--- an allegation tossed back by Reliance to competitors. "The onus is rightly on the incumbent operators not to misuse their market power by creating unfair hurdles," Ambani reiterated.

Jio may extend the period of free services in case Jio subscribers are not able to get adequate experience of seamless connectivity across the network due to point of inter-connect congestion, mobile number portability restrictions and if the quality of service parameters are not as per the benchmarked by desired by company management.

Existing `invited’ or test users of Jio, who enrolled for the Jio Preview Offer, will be transitioned to the Jio Welcome Offer.

Tariff Plans

The Company filed  detailed tariff plans with TRAI. Ambani enumerated the following principles used for formulating the tariff plans:

i)       Benefits of technology would be passed onto customers. All domestic voice calls for Jio customers will be absolutely free, across India and at any time. Domestic roaming charges will not apply in Jio tariffs.

ii)      Data tariffs have been made highly affordable, with full transparency, without any associated conditions. The company is offering the lowest LTE data rates in the world. Additionally, it would offer unlimited night time LTE data.

iii)      The Jio-Apps bouquet, which is worth Rs. 15,000 for an annual subscription, will be available complimentary for all active Jio customers up to 31 December 2017. This has been done to make digital life available to everyone.

iv)  A special student discount offer, with 25% more data on the main tariff plans, would be offered to all students.

v)  Jio has introduced a simple tariff structure with only 10 main plans, designed to fit every budget, as against the 22,000 tariff plans prevailing in the country today.

These are summarised here:

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Industry Reactions

An official statement from British telecoms giant Vodafone India said, “We have always offered great value to our customers, backed by excellent customer service, a nationwide presence, and Vodafone SuperNet, our best network ever. We will continue to do so for our hundreds of million customers across the country.”

Cellular Operators Association of India (COAI), an apex body of telcos in India, which had gone public over differences with member Reliance Jio taking the war of words to the Prime Minister’s Office, welcomed the announcements.

“Reliance Jio is a valued member of the COAI. We wish to congratulate them on the announcement of the launch of their services. As a valuable member of the association, we welcome them with great warmth and applaud the bold vision of Mukesh Ambani and the innovation he proposes to bring to the industry,” Director General COAI Rajan S. Mathews said in a statement.

“We welcome Reliance Jio’s entry to the digital world and wish them the very best. We also welcome Jio’s call to leading operators to work together. As a responsible operator, we will fulfill all our regulatory obligations as we have always done,” Bharti Airtel, India’s largest telecom operator in terms of subscribers, said in a statement, adding,”Over the last 20 years, Airtel has been contributing towards building a digitally enabled India and remains fully committed to and take leadership in supporting the government’s Digital India vision. We will continue to innovate and deliver best-in-class products and services to our customers.”

Content aggregators and OTT players were also quick to hail Jio’s game plan. Zee Entertainment Enterprises MD and CEO Punit Goenka tweeted: “Mukesh Ambani's #datagiri opens up a new chapter for the telecom industry and for the consumers! The data plans launched, which are cheapest across the world, are indeed a boon for content creators and consumers!”

Viacom 18 Group CEO Sudhanshu Vats said in a tweet that Reliance Jio is truly changing the face of India's telecom sector. “This is #digitalrevolution!” he added. Viacom18 is a joint venture between Viacom Inc and RIL-controlled Network18 group that operates several news and entertainment TV channels, including Colors and Colors Infinity, apart from other media properties.

As many years back Reliance Telecommunications, part of an unified RIL under Dhirubhai Ambani, had created disruptions in the nascent Indian telecoms market, over a decade later his elder son, Mukesh, is replaying the disruption saga, albeit more digitally. Déjà vu indeed!

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