When Dhirubhai Ambani coined the phrase ‘ Karlo dhunia mutthi mein ’ (Hold the world in your fist) maybe he hoped his sons Mukesh and Anil would carry out his vision of putting mobile phones in the hands of a billion Indians.
The Monsoon Hungama tariff plan launched by Reliance in 2003 nearly achieved that goal, bringing tariffs for voice calls down to just 40 paise a minute from the then existing rate of ₹2 a minute. However, a wrong choice of technology and a fierce battle between the two brothers brought that vision to a halt.
Nearly a decade and a half later, Mukesh is once again trying to fulfil that goal with his new philosophy of ‘Datagiri’, where everything from voice telephony to entertainment, music and other data usage will be offered at one-fifth the market rates.
Similarities aplentyThere are a lot of similarities in the way Mukesh is positioning Jio to how Dhirubhai envisaged the earlier venture, Reliance Infocomm ( Now Reliance Communications, or RCom). Both father and son have sought to reach affordable telecom services to the last Indian. While the senior Ambani was concerned about voice telephony, Mukesh is now having similar ambitions for data.
“Data is the oxygen of digital life and Jio’s mission is to meet this exploding need for India, and take our nation from data shortage to data abundance,” Mukesh said at the AGM on Thursday.
There is also the common theme of being the disruptor. Dhirubhai wanted to take on incumbents by bringing down tariffs. “Make a phone call cheaper than a post card and you will usher in a revolutionary transformation in the livesof Indians,” is how Dhirubhai once articulated his vision.
Since the launch of Monsoon Hungama, mobile call rates have not crossed ₹1a minute. Now, Mukesh has dropped data rates from ₹250 per GB to ₹50 per GB.
The other similarity is in the scale of operations. Most telecom operators have rolled out networks gradually, starting with a few circles and then expanding nationwide. Reliance Jio boasts of being the largest 4G-only telecom network in the world, covering 18,000 cities and towns and over 2 lakh villages on Day One.
When RCom was launched it was one of the finest networks of the time, with pan-India optical fibre cable spread over 2 lakh route kilometres. However, the choice of CDMA proved to be a disaster. RCom also suffered because of its initial positioning as the poor man’s phone. The aspirational users chose to stay with Airtel and Vodafone.
Mukesh, on the other hand, has bet on LTE technology, being used by most operators globally. He may have erred in buying the 2300 MHz band initially. Poor propagation characteristics of this band has been one of the reasons why RJio’s launch got delayed. But since then RJio has bought airwaves in other bands.
The only thing Mukesh may have to guard against is pushing price levels so low that it begins to hurt not just the rival players but its own profitability.
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