Jio's Data Pricing to Disrupt the Telecom Apple Cart - Chart Of The Day 2 September 2016 - Equitymaster
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Jio's Data Pricing to Disrupt the Telecom Apple Cart
Sep 2, 2016


Reliance Industries has been quite a late entrant in the 4G mobile phone space with peer companies such as Bharti Airtel, Vodafone India and Idea Cellular having already launched their services. Although the company had won the spectrum rights way back in 2010, stabilisation in the relatively new Long Term Evolution (LTE) technology adopted by its partner Jio led to the six-year delay in the roll out of services. This technology was first unveiled in North America in 2010.

Additionally, building the pan-India network comprising of the optic fibre network and telecom towers and procuring low cost 4G devices pushed ahead the company's 4G foray. But now with all the groundwork in place, Reliance Jio wants to leave no tables unturned to make its 4G venture a success.

The company wants to literally hit the ground running as reflected in the mouth-watering offer used as a bait to attract the maximum subscribers. The offer not only includes low cost Lyf phones, but lifetime free voice calls as well as ultra-cheap data plans and tariffs. As per the company presentation, the mobile phone data will be priced as low as Rs 50 per gigabyte (GB) which is not only the lowest in the country but also globally. While this huge price disruption will no doubt benefit the mobile phone users, we are not quite sure whether the pricing math will be sustainable for telecom companies in the long run.

Data Source: Live Mint, Reliance Industries presentation

This Chart Of The Day was published in The 5 Minute WrapUp - Should You Be an Active Investor, Or a Passive One?

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