MUMBAI: The Indian tycoon who punched his way into the country’s mobile phone industry by starting a carrier with free services took another swing at rivals, unveiling a cheap feature phone with access to unlimited data. Competitors’ shares plunged.
The wireless unit of billionaire Mukesh Ambani’s retail-to-refining conglomerate will offer a data-enabled feature phone for Rs1,500 ($23) starting August 15, he told shareholders in Mumbai on Friday. The Reliance Jio Infocomm Ltd handset, or JioPhone, will come with tariff plans as low as 23 rupees for two days or 153 rupees monthly.
Bharti Airtel Ltd, India’s largest operator, fell 4.1 per cent, the most intraday in four months, as of 2:38pm in Mumbai. Idea Cellular Ltd, which has agreed to form the No. 2 carrier in a merger with Vodafone Group Plc’s local unit, sank 7.3 per cent. Bharti Airtel and Idea didn’t immediately respond to email seeking comments.
“Voice will always be free on the JioPhone,” Ambani said at a shareholders’ meeting in Mumbai. “Jio will give users access to unlimited data on the JioPhone.” The data access will start August 15, he said.
The move by Ambani, India’s richest person, opens a new front in a price war that is already prompting consolidation within a debt-strapped industry that includes 11 carriers. Rivals have cried foul against Jio’s tactics and have blamed widening losses on the new entrant.
Jio’s business practices will allow the upstart “to use its muscle power and price its services in a predatory manner to kill the rest of the industry and create a monopoly,” Bharti Airtel said in a July 20 statement.
Reliance is said to be in talks with I-phone assembler Foxconn to manufacture a mobile handset, ET Now said in a Twitter post on Friday citing unidentified people familiar. The tweet didn’t say whether the tie up is for the JioPhone.
The phone is “effectively free,” said Ambani, because the initial Rs1,500 payment can be refunded after three years if the phone is returned.
