Billionaire Ambani's Jio Charging 88% Less for Data Service

  • Jio prices data at 0.5p/10 kb versus 4p/10 kb at Idea, Airtel
  • Reliance Jio pricing available in packaging of new SIM cards

Billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd. is charging 88 percent less than competitors for basic prepaid data services as the Indian telecom venture seeks to attract users in the world’s fastest-growing smartphone market.

Jio has priced data at 0.5 paisa per 10 kilobytes, compared with 4 paisa per 10 kilobytes at market leader Bharti Airtel Ltd. and other rivals. Call rates and text messages cost about the same, according rates on packaging for the service’s SIM card that’s being offered by invitation for a three-month trial.

Ambani, India’s richest person, is plowing more money into the wireless business as he prepares to shake up the country’s crowded, indebted industry by introducing fourth-generation wireless services through Jio. India is the world’s second-largest smartphone market, which is projected to double in a few years from its current 220 million users.

“It’s logical that if your peer is charging 88 percent lower data rates, then it will force others to lower their pricing too,” said Aliasgar Shakir, an analyst at Elara Securities in Mumbai. “Telecom services are a commodity after all, so Jio’s pricing will have a lot of competitive relevance.”

While Jio has said it won’t start a price war, Airtel on Wednesday announced it was offering double the data for prepaid customers. Last week, Vodafone Group Plc’s Indian unit introduced a new pay-as-you-go plan for younger customers.

Reliance Industries Ltd. rose 1.8 percent, the most in a month, to 992.80 rupees at the close in Mumbai. The shares have declined 2.2 percent this year, compared with a 1.3 percent drop in the benchmark S&P BSE Sensex index.

Jio’s new tariffs are for services without a data pack that consumers typically buy. The prices being offered could be promotional prices and Jio’s network coverage could impact whether it lures customers, Shakir said.

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