India’s richest man is rolling out a $20 billion mobile network that could bring lightning-fast Internet to hundreds of millions of people.
Indian consumers are already celebrating the arrival of Mukesh Ambani’s new Reliance Jio service, seizing on the billionaire’s promise to deliver rock bottom prices and download speeds that will enable streaming video.
The 4G network, which reaches more than 80% of the country, officially went live Monday with a set of generous introductory offers. Indians will be able to use Jio for free until the end of 2016, and pay as little as 149 rupees ($2.25) a month for data after that.
“Anything and everything that can go digital is going digital — at an exponential rate,” Ambani told investors last week at his company’s annual general meeting. “Life is going digital.”
Only one fifth of adults in India have access to the Internet. Few public Wi-Fi spots exist, and fast broadband connections require infrastructure that is rarely found in poorer urban areas, much less rural ones.
But that is changing fast. If the Jio network succeeds, Ambani will be able to capitalize on a seismic shift that could see hundreds of millions of Indians come online in the coming years — in most cases via a smartphone.
It’s a market that tech industry giants desperately want to crack. Google (GOOG) has installed free Wi-Fi at train stations across India, and Facebook (FB, Tech30) tried to offer a free version of its platform.
Ambani has invested billions constructing nearly 100,000 telecoms towers across India. He estimates that Jio already covers some 18,000 cities and 200,000 villages. By March 2017, his aim is to reach 90% of the population.
Building a national 4G network from scratch represents a major risk for Ambani, who got out of telecoms about 15 years ago after a dispute with his brother, Anil Ambani, who controls Reliance Communications.
The brothers, who together are estimated to be worth $26 billion, have patched things up in recent years. Jio will be able to use radio frequencies owned by Reliance Communications.
Rival networks have responded to the launch of Reliance Jio with special offers of their own, making a price war a near certainty. Airtel has slashed its prices for 3G and 4G service by 80%, and Vodafone (VOD) has boosted the amount of data in its plans by nearly 70%.
If Jio, which means “live life” in Hindi, is to become another mega business in Reliance’s stable of energy, media, chemicals and retail operations, the network will have to be able to handle the load from millions of new customers.
On Tuesday in New Delhi, a device on the Reliance network was showing impressive download speeds of 21 megabits per second. With $20 billion at stake, that kind of performance needs to be replicated across India.
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