Mukesh Ambani’s Reliance Industries (RIL), which has pan India license for 4G network, has joined hands with Samsung to bring LTE devices for as low as Rs 5,500 report Times Of India.
“The entry-level smartphones are likely to be sold with data packages starting at as low as Rs 100,” report further added.
RIL is expected to launch the test services in Delhi and Mumbai by middle of this year. However, official launch with services in more circles with be launched on 28th December (Dhirubhai Ambani’s birth anniversary).
What is well known is RIL will bulk purchase devices to reduce cost, offer low rates for data services (starting with Rs 100 plans), and also subsidise the devices and offer EMI’s to help people buy and use these on their network. Reliance Industries through Reliance Infotel wants to be a volume player making the data services as widely used service.
Earlier, it was said that RIL is looking at tablets, but recently government has allowed it offer voice services also on the network on payment of Rs 1650 crore and that means now they will be looking at smartphones as the primary device that they will focus on.
According to an earlier report, Mukesh Ambani owned Reliance Infotel , which is the only company with pan India BWA (4G/Broadband wireless access) spectrum, will offer LTE tablets for as low as Rs 3,500 too .
Way back in December 2010, ‘The Mobile Indian’ had reported about the cheap LTE tablets that Reliance planning to launch. As reported by us earlier, there would be bundled plans accompanied by these low cost subsidised tablets for as low as Rs 10 for 1 GB of data.
Now with voice services permitted on 4G network, the entire operator business will change and recent spurt in tariffs may be reversed with competition heating up like never before.
Earlier there was intense competition thanks to many new operators entering the market in 2008 but in January last year, the Supreme Court of India cancelled the licenses of these new players and most of them left the market and few like Telenor, Videocon and MTS remain limited to few circles. This meant less competition to fend resulting in hike in tariffs.
But Mukesh Ambani’s entry to the scene is expected to change the scenario. RIL is backed by 20 MHz of spectrum with permission to offer high speed data (100 Mbps) and voice service for which it paid less than half the amount as compared to 3G operators who got only 5MHz spectrum. For instance, RIL paid Rs 13,000 crore for 20 MHz spectrum in all 22 circles while for just 5 MHz Bharti Airtel paid Rs 12,295 crore for spectrum in just 13 circles.
Which means that RIL will be able to offer data services at low cost without the worry of a congested network and will also because the investment is lower and can also offer voice services which contributes to about 85 percent of the revenue of existing operators. And with devices available at lower price and zero percent interest loans it won’t be surprising if RIL manages to cannibalise the market.