Mukesh Dhirubhai Ambani is an Indian business magnate, the chairman, managing director, and largest shareholder of Reliance Industries Limited, a Fortune Global 500 company and India’s most valuable company by its market value. This is the basic introduction of one of the world’s richest man. The 62 years old businessman has a net worth of 5940 crores. His introduction of the JIO in India changed the concept of communication systems in India. After its existence, the other networking companies suffered a lot. Recently JIO brought out new IUC policy and it is again hoping to start another tariff war.
A new price war may emerge in the broadband sector with Jio Fiber’s aggressive pricing of its broadband subscriptions. A similar price war triggered when Reliance Jio entered the market in the year 2016 with rock-bottom pricing of mobile data plans. The competitive intensity in the broadband sector will increase as major players to fight to hold on to customers as the price war shifts, according to a report by Elara Capital.
The Reliance Company seems to be set to repeat history with its aggressive pricing to the broadband subscriptions. It undercuts most of the competition, JIo Fiber’s promised monthly plans will be starting at 700 rupees per month with a minimum speed of 100 Mbps. At just half of the price, the company is offering 50GB at a speed of 10mbps which will cut off to 1mbps after fair usage policy.
Similarly, when Jio entered the market back in the year 2016, the data became cheaper than before. The move also pushed out most of the competition in the market. And now, some of the major players in the market are Bharti Airtel and the Vodafone Idea. These two companies are fighting to recover losses as their debt is continuously rising. With the way Jio Fiber’s pricing its products so far- it looks like that there might be another price war on the horizon.
When the data prices on mobile reduced, it brought more people online. But after three years of racking up debt, telecom operators are increasing their prices back up by as almost up to 40 per cent.
They have also asked the TRAI to set up a floor price for data services in order to regulate tariffs because the price war has gotten so intense that no operator will voluntarily correct their prices.
The telecom sector’s price war had JIO in the lead within a short time limit, not just in terms of the users but also in terms of the revenue in the market share. And, the same seems to be set to happen in the broadband sector as well again. Others believe that Jio Fiber’s broadband will not be disruptive asserting that the other operators offer higher value on a per Gb basis.
Today the offers made by JIO continue to keep the customers committed in Reliance whereas the other companies are having a difficult time to cope up with the mighty JIO in the market.