After a reported investment of $22 billion and six months of active trials, Ambani – elder brother and business rival of Hollywood investor Anil Ambani – will finally launch Reliance Jio on Sept 5.
Jio, a division of Mukesh Ambani’s Reliance Industries, is a data, mobile phones and wifi outfit that could take broadband Internet and broadcast TV far beyond their current reach in poorly-connected India. It will offer free mobile data until the end of the year, and then at rates a fraction of competitors. Voice calls within India will be free in perpetuity.
Reliance Jio will be available to 90% of India’s 1.25 billion population by March 2017, said Ambani, addressing his company’s annual general meeting on September 1. In contrast only 61% of Indian households (168 million) had a TV set at the end of 2014.
Ambani aims to have Jio sign up 100 million subscribers in the shortest possible time. It is also introducing smartphones with prices beginning from $45.
In 2015, India had 351 million Internet subscribers, of which 105 million are broadband users. The country has some 167 smartphone users, a number that is predicted to rise to 520 million by 2020, according to a recent E&Y report.
Indian media consumption is rapidly shifting from traditional formats like broadcast and cable television towards digital media, the E&Y report states.
Although Mukesh Ambani is a latecomer to the media sector, Reliance Industries is no innocent bystander in the media shakeup. In 2014 the company took controlling stakes in Network 18 Media and TV18 Broadcast, which are the joint venture partners of Viacom in India.
Jio’s cheap data rates are already having a knock on effect, with competitors considering reducing their data costs. This in turn is expected to fuel further digital consumption on personal smart devices.
“This use of smaller screens on personal devices will fuel “personal escapism” (watching content individually) as opposed to “group escapism” (watching TV in the living room) and this is expected to increase content consumption manifold, as well as change the type of content consumed,” according to the report.