Jio to charge for data from Apr; calls to remain free
21 Feb 2017 10:39 PM IST
Billionaire Mukesh Ambani's telecom unit Jio will begin charging for data services from April but will give steep discounts for a year to over 100 million customers who have come on board within six months of its launch.
While local voice calls, STD and roaming will continue to be free, he promised to match the best offers of rival telecom companies and add 20 per cent more data from April 1.
In a speech broadcast live from the company's social media accounts, Ambani said Jio has added 100 million subscribers in 170 days since launch in September last year and the company plans to extend the network to cover 99 per cent of population by this year-end.
Jio, which marked Ambani's re-entry in telecom space after a decade with free voice calls for life and free data for a promotional period that was extended until March 31, will offer existing users unlimited services for a year at a monthly charge of Rs 303 and one-time membership fee of Rs 99.
The entry forced incumbents to cut tariff and consider mergers to face competition from Jio. Vodafone and Idea are considering a merger to create a player bigger than the market leader, Bharti Airtel.
The incumbents also challenged Jio's promotional scheme before telecom regulator Trai, saying free services beyond 90- days were a violation of rules.
While shares of Reliance Industries, the parent firm of Jio, rose 1.36 per cent to close at Rs 1,088.25 on BSE, rival Bharti Airtel tanked 3.9 per cent to close at Rs 362.95. Idea Cellular fell 0.4 per cent to Rs 108.30.
"Jio launched its services on September 5 of last year. Today, just 170 days later, Jio has crossed the 100 million customer mark on its 4G LTE, all-IP wireless broadband network," Ambani said. After end of its Happy New Year Offer, which was kind of an extension of the initial promotional offer of free voice and data to attract customers, Jio will introduce tariff plans from April 1.
Ambani said all domestic calls to any network including STD and roaming will continue to be free. For data, Jio will not only match the highest selling tariffs of each of the other leading Indian telecom operators but also provide 20 per cent more data in each of these plans, he said.
Industry relieved that Jio will start charging: COAI
Cellular operators' association COAI on Tuesday expressed relief that newcomer Reliance Jio has announced "price points" for data services post April 1, which although "aggressive" will not bleed the industry.
The Cellular Operators Association of India (COAI) said the pricing along with customer experience determined by a telecom network's ability to take data traffic load will differentiate the winners from losers going forward.
"They have announced the pricing for the services, which is a good news for the industry, at least they have started charging ... Our members will be giving their response but as an industry observer I can say that the industry will be relieved that price points have been announced. They are aggressive but not bad," COAI Director General Rajan S Mathews said.
Jio has announced that its existing subscribers and new customers who come on board by March 31, 2017, can continue to enjoy unlimited benefits of its 'Happy New Year Offer' for one more year (that is March 31, 2018) by paying one-time fee of Rs 99 and Rs 303 a month.
"The Rs 99 plus Rs 303 is not a bad price point ... if the ARPUs (Average Revenue Per User) can be brought to Rs 300 from the current Rs 180 ...," Mathews said.
Aggrieved by free voice calls of RJIO: Vodafone to HC
Vodafone India on Tuesday told the Delhi High Court that it was aggrieved by the free voice services being provided by Reliance Jio (RJIO) as it violated TRAI's tariff orders.
Vodafone contended before Justice Sanjeev Sachdeva that inter-connection usage charges (IUC) form the floor price as per tariff orders of the Telecom Regulatory Authority of India (TRAI) and "one cannot go below that".
The company alleged that by providing the free voice calls and continuing to do so as a promotional offer beyond a period of 90 days, RJIO was violating IUC norms and TRAI tariff orders and regulations.
It said it was also aggrieved by TRAI's stand of allowing the alleged violation to continue.
Opposing maintainability of Vodafone's plea, RJIO said if the telecom major was aggrieved by TRAI's decision giving a clean chit to RJIO, then it should be challenged before the Telecom Disputes Settlement Appellate Tribunal (TDSAT) as done by Bharti Airtel and Idea Cellular.
The court thereafter listed the matter for hearing on February 27 when it will hear arguments on maintainability of Vodafone's petition alleging inaction by TRAI against RJIO for alleged violation of tariff orders and regulations.
During the day's hearing, Vodafone contended that free plans can be offered as long as the weighted average of all other plans of a telecom service provider (TSP) complied with IUC floor price.
To this, the court asked what if the subscribers opted for only the free plans.
In response, Vodafone said that TSPs have to tailor their plans in such a way that customers opt for other plans also as the operating costs have to be recovered as per tariff orders.
However, voice calls are completely free across all the plans of RJIO, Vodafone said.
RJIO had on last date said that TRAI has held that its free offers to subscribers was perfectly legitimate.
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