What would one expect at the 40th Annual General Meeting of a company that is synonymous with size? Expect more of it? Yes. Because just as the company heralded the equity culture in India, it now aims to, in Reliance Industries Chairman Mukesh Ambani’s own words, “democratise the digital culture in India”. So a 1:1 bonus, the largest in India’s corporate history, was lost in the din. What took over the mindspace at Birla Matushree was a free, intelligent and feature-rich JioPhone.
Subscribers will be able to enjoy unlimited data on the JioPhone at Rs 153 every month. They will also have the option of recharging with a Rs 53 voucher that will run for a week or with a Rs 23 coupon carrying a two-day validity.
The impact of today’s announcement will be felt far and wide. While RIL subsidiary Reliance Jio Infocomm continues to rattle the incumbent mobile service providers, today’s announcements shook up shares of cable TV distributors and direct-to-home TV service providers as well. Surely, the disruption unleashed by Reliance Jio last year is set to spread to other industries.
Telecom & DTH Stocks Crack
RIL share rose 3% while those of incumbent mobile operators like Bharti Airtel and Idea Cellular were down 3% and 5%, respectively. Direct-to-home service providers like Dish TV and Sun TV too fell 7% and 4%, respectively. Ambani reiterating his company’s commitment to bringing world-class, super-fast optic fiber broadband connectivity to people’s homes only made the matters worse for those stocks.
The Jio Phone will initially cost Rs 1,500 but this will be refundable after three years. The most unique feature about the phone is that the user will be able to connect the mobile to any kind of TV including the old, bulky TVs known as CRT (cathode ray tube) TVs and mirror all content. Like the 125 million Jio service users so far, all Jio Phone buyers will also get free voice calls.
JioPhone Availability
Available for beta testing from August 15, the bookings for the JioPhone will start from August 24. Buyers who have pre booked will get the phones from September on ‘first come, first served’ basis. All JioPhones will be made in India from October.
The spirit of Ambani’s almost one-hour-long speech went with the faith of the company’s 2.5 million plus shareholders, the chants of “Jio, Jio” inside the auditorium complimenting the passionate speech.
Higher Stakes
While in Ambani’s words, Reliance’s Golden Decade has just begun, it is not the first time India’s most valuable company has disrupted the market. People still remember the sturdy, blue screen and white body LG and Samsung phones that allowed them to ‘Kar Lo Duniya Mutthi Mein’. The ‘Monsoon’ had a lot of ‘Hungama’ then too and the CDMA voice those days was as clear as they came.
The stakes are only higher and wider this time. The pre-2000 India was a country coming out of licence raj and landlines still ruled. A 3-minute inter-state call — known as STD or trunk call — cost as much as Rs. 24 even in early 2000. Today’s India is vastly different, as Jio has itself demonstrated — the company garnered 100 million customers within 170 days of its launch. It added 7 customers per second every single day — faster than Facebook, WhatsApp or Skype. It is the largest and the fastest technology adoption of any kind anywhere in the world.
RIL, with Jio, is not going to be content just connecting people through voice and data. It wants to get inside homes, influence — if not rule — daily lives. Offering a phone that’s virtually free, can take voice commands and also carry content to any TV marks a paradigm shift that may wipe out existing industries and create new ones.
With an eye on replacing the 50 crore feature phone users in India, a target of making 5 million JioPhones available every week conveys a very small message of the big story.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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