The Disruptor

Mukesh ambani’s daring rs 1.5 lakh crore jio gamble has sent rival telcos into a mad scramble. Consumers aren’t complaining—they’re smiling at the prospect of better services at lower prices.

- M.G. Arun

IT WAS 2010 AND MUKESH AMBANI, the Reliance Industries (RIL) chairman, had only just acquired Infotel Broadband from telecom pioneer Mahendra Nahata. The company owned broad- band spectrum in 22 zones across India. The acquisition was to be the springboard from which Ambani would launch his next telecom offensive, even more disruptive than the launch in 2002 of mobile telephony at throwaway prices. Brainstorming with close confidant Manoj Modi to blueprint the offensive, Ambani spelt out his brief. Modi was to focus on two key areas: he was to procure cutting-edge technology, and band together the old warhorses from Reliance Infocomm, the men who, back then, had helped him roll out mobile telephony that was “cheaper than sending post cards” (the challenging prescription Dhirubhai Ambani is said to have given his older son to make a successful go of the telecom business).

What followed over the next six years were the birth pangs of what Ambani calls “the world’s biggest start-up”, leading up to the birth of Reliance Jio, Ambani’s second coming in the telecom industry. This time, the disruption is all but certain: data packages are being sold at a fifth of the prevailing market prices, not to mention voice, video, music and content being given free to subscribers for the first four months, beginning September 5. As for voice services, i.e., phone calls, they will be forever free. Or so is Ambani’s seemingly unbelievable offer to consumers, and the crux of his threat to other telcos, whose businesses are currently heavily skewed towards paid voice services. Illustratively, 70 per cent of market leader Bharti Airtel’s revenues currently come from voice (see box: What You Pay for Voice).