India's Ambani to launch free smartphone as he shakes up telecoms

 21 Jul 2017 - 12:30

India's Ambani to launch free smartphone as he shakes up telecoms
Reliance Industries chairman Mukesh Ambani (R) and his wife Nita Ambani (2R) pose with their children (L-C) Akash Ambani, Anant Ambani and Isha Ambani as they arrive for the company's 40th AGM in Mumbai on July 21, 2017. (AFP / INDRANIL MUKHERJEE)


Mumbai: India's richest man Mukesh Ambani said Friday that his telecoms venture Jio would launch a free smartphone, escalating a price war that is shaking up the country's ultra-competitive mobile market.

The announcement, made at a boisterous Reliance Industries annual general meeting in Mumbai, sent shares in rival telecoms operator Bharti Airtel plummeting almost six percent.

"This breakthrough and revolutionary device named JioPhone, along with Jio's disruptive tariff, will unleash the power of digital life in the hands of 1.3 billion citizens of the largest democracy in the world," said Ambani.

The tycoon told shareholders and staff, who regularly burst into chants of "Jio, Jio, Jio", that the phone, the latest entry into India's crowded market, would be available from September.

"The JioPhone will be available to all Indians for an effective price of Rs zero," Ambani said.

The much-awaited phone was launched by Ambani's son and daughter Akash and Isha Ambani. The phone will support 22 languages.

The pre-booking for the phone will start from August 24 and it will be given away on a first come first served basis. It will be available for all from September.

JioPhone, which is targetted at the 50 crore feature phone users in the country, will offer free voice calls and SMS to customers. For 4G data, customers need to pay Rs 153 per month. He said JioPhone can be connected to any TV, not just internet TV, to watch videos. The phone is pre-loaded with applications like Jio Cinema, Jio Music and others.

Describing JioPhone, Ambani said: "JioPhone is Made in India by young Indians for all Indians."

He said the telecom sector in India took 25 yeras to build 2G network for customers, "Jio will do 4G in three years."

He said customers would only have to pay a deposit of 1,500 rupees ($23.32) for the 4G-enabled device, which would be fully refundable after three years.

The announcement comes almost a year after Ambani launched the Reliance Jio 4G network with free voice calls for life and vastly cheaper data plans, forcing rivals to dramatically slash their tariffs.

Jio has signed up 125 million subscribers since its launch in September 2016, causing a rush to consolidation in the multi-billion-dollar sector as competitors scramble to match its deep pockets.

British mobile phone giant Vodafone is merging its Indian unit with Idea Cellular to help fend off Jio, which is backed by Reliance Industries -- India's immensely wealthy energy-to-chemicals conglomerate headed by Ambani.

Bharti Airtel and Idea Cellular have endured losses since Jio's arrival and shares in the companies fell nearly three percent and six percent respectively following Ambani's announcement Friday. Reliance rose three percent.

The news will have also been carefully watched by South Korean tech giant Samsung and Chinese mobile phone maker Xiaomi who possess the lion's share of India's smartphone market.

Samsung leads the market with 28 percent while nearly 14 percent of phones sold in India are made by Xiaomi, according to a study by the International Data Corporation, an IT research firm.