The 45-minute speech of Mukesh Ambani at Reliance’s annual shareholder meeting became the worst nightmare for Idea and Bharti Airtel, the current market leaders.
As Ambani took the stage, Shares of telecom incumbents such as Bharti Airtel BSE -6.37 %, Idea Cellular BSE -10.48 % and Reliance Communications BSE -8.81 % dropped up to 9 per cent on Thursday.
In his speech, he announced that Jio’s 4G network covers 18,000 cities and 200,000 villages and announced free voice calls for all Jio customers with data charges at Rs 50/GB. Within 10 minutes of this announcement, Airtel and Idea lost Rs 13,800 crore of their market values.
“All voice calls for Jio customers will be absolutely free,” Ambani announced. “Roaming charges will also be zero,” added Ambani. The billionaire industrialist said Jio is targeting 100 million users in a shortest possible time, while the company also announced “super-affordable” handsets under the LYF brand starting Rs 2,999.
Other telecom players were tightening their belts and had announced various schemes to retain existing subscribers. Market leader Bharti Airtel on Monday announced two plans with data tariffs effectively lower by an eye-catching ’80 per cent’. Earlier, Airtel, Vodafone and Idea had cut their tariff and bundled free calls.
The venture, Reliance Jio Infocomm, will be the world’s biggest startup with an investment of Rs 1,50,000 crore, the company had said in March. It is believed that the company’s subscriber base has already swelled to 25 million during trials.
In addition to 4G, Reliance has made voice calls free, starting from September 5 till December 31, 2016, which was a Source of the income of telecom operators.