Mukesh Ambani, chairman of Reliance Industries, believes India is big enough to sustain competition from up to five operators, after his upstart Jio finally launched services earlier this week.
Ambani, speaking in an interview with Economic Times, detailed his vision for the Reliance-owned Jio, expressing confidence that the company will generate healthy returns, despite its low cost model.
An example of Reliance Jio’s low-ball approach is its lowest cost data tariff priced at INR50 ($0.70) per 1GB.
“I can assure you that we are not going to lose money,” Ambani said. “We are not looking to make a killing, but we are looking to make a high-teens return on our capital, which is 18-19 per cent return, over the investment period.”
Reliance Jio confirmed last week it would officially come to market on 1 January, with 10 tariffs on offer, while an initial welcome offer launched on Monday, offering subscribers free services until the end of the year.
The company has set a target of reaching 100 million subscribers in the shortest possible time, significantly stepping up competition with market leader Bharti Airtel, Vodafone India and Idea Cellular.
Ambani said he “respected” the competition, and believes all the operators must now co-exist.
“This is a big enough market and no one operator can take it all,” he said. “I see sustainability for at least 4-5 operators in this market of 1.2 billion Indians. For our point of view, 100 million is a single digital market share that we are aiming for. So, we are still babies in this business.”
In the wide-ranging interview, Ambani also hit out at the structure of trade body COAI (Cellular Operators Association of India).
He said the body only really represents the views “of one or two operators, and not the view of the entire industry “, with voting rights dependent on the revenue of the operators.
“We have zero revenue, so we are crowded out,” he said.
Jio has recently been embroiled in a spat with COAI, which accused the operator of operating a full blown service disguised as a trial.