On September 1, 2016 the largest Indian company by market cap – Reliance, entered the telecom market…again. In 2002, Reliance launched its first mobile network and brought the per minute call rates down. This time around Mukesh Ambani launched Reliance Jio at the annual shareholders meeting and vowed to bring down the data prices.
I remember last year calling Vodafone to get a better 4G data package and they were offering plans with 2GB, 4GB and some with 8GB of data. And my cable TV provider Hathway was offering monthly plans for 60GB and 80GB of high-speed internet at 50Mbps. Mukesh bhai was not kidding about bringing down the prices. Today, Vodafone is offering me around 7GB a month and Hathway is now offering 200GB a month at the same price I was paying. I’m sure I can negotiate and get better pricing but I’ll wait and see.
When Jio was launched they gave it away for free so everyone could experience high speed internet, which was a brilliant move. It was a hugh gamble by Mukesh and team and I think it has paid off. Because, once you get a taste of high speed internet, you are hooked and it’s really tough to go back to 2G (edge) or 3G speeds.
Although Jio has many pricing plans, I think it’s all noise. They are focused on only 1 plan – the Rs. 303 monthly plan. For Rs. 303 you get unlimited voice calling across India and 28GB of data. 28GB of data per month is a hugh disruption not only for the Indian telecom scene but around the world. AT&T Wireless in the US recently announced their “unlimited” data plan that is capped at 22GB per month.
So why did Jio pick Rs. 303 as the price point that they wanted to focus on? Currently, the average mobile phone user in India spends about Rs. 141 per month, what the industry calls ARPU – average revenue per user. I think Jio is betting that the average Indian user will double their spend to over Rs. 300 a month but only if they find value in it. And from the looks of it, they are finding value in the service. Everywhere I look, people are glued to their phones and streaming content such as movies, music and TV shows. Jio has over 100 million free users and as of March 31, 2017 over 72 million people have applied for the Rs. 99 Jio Prime yearly program.
As I mentioned because of Jio the other telecom providers have dropped their prices as well. Below is a quick comparison:
Jio – Rs. 303, unlimited voice calls, 28GB
Vodafone – Rs. 346, virtually unlimited voice calls, 28GB
Airtel – Rs. 349, unlimited voice calls, 28GB
And just for fun, let’s compare how these plans stack up against the US wireless carriers:
Sprint – Rs. 3888 ($60), unlimited calling, 23GB
T-Mobile – Rs. 4536 ($70), unlimited calling, 28GB
Verizon – Rs. 5184 ($80), unlimited calling, 22GB
AT&T Wireless – Rs. 5832 ($90), unlimited calling, 22GB
I would like to take this opportunity to thank you Mukesh Bhai for changing the telecom game in India not once but twice. I run by your house almost everyday and think of two things as I pass, just how fat is your internet pipe and why do your Z level security agents not like when I try to run on your sidewalk. Or is your fiber optic cabling located under the sidewalk?