Mukesh Ambani, chairman of Reliance Industries Ltd. Photo: AFP
Mukesh Ambani, the chairman of India's Reliance Industries. Photo: AFP

Aggressive marketing tactics by discounter Reliance Jio Infocomm have given Indian consumers the lowest mobile phone data rates in the world, on top of very low call charges, according to a new report. The service provider has signed 280 million customers in just three years.

Price comparison site Indian customers found that Indians were paying an average of just 18 rupees (26 US cents) for one gigabyte (GB) of data, compared with a global average of 600 rupees ($8.56). The site analyzed 6,313 mobile data plans in 230 countries between October 23 and November 28, 2018, including 57 in India. Data rates there ranged from 1.41 rupees (2 US cents) for 1GB to 98.83 rupees ($1.41).

Kyrgyzstan (27 cents for 1GB) has the lowest data costs behind India, followed by Kazakhstan (49 cents), Ukraine (51 cents) and Rwanda (56 cents). At the other end of the scale, it cost $6.66 for 1GB in the UK and $12.37 in the US in 2018, but even they were not the worst: Zimbabwe holds the dubious title of the most expensive data plans, with an average $75.20 for 1GB.

In India, the low costs are mostly due to the entry in 2016 of Reliance Jio, which forced the established service providers to match its cheap rates. The company is owned by India’s richest man, Mukesh Ambani, who also figures in the upper levels of the latest Forbes billionaires list.

Forbes magazine reported in its 2019 list of the global rich that the phenomenal growth of Reliance Jio had helped lift Ambani six places to 13th with a personal income of $50 billion, up from $40.1 billion in 2018. His oil and gas conglomerate Reliance Industries, which had revenues of $60 billion in 2018, is ranked among India’s most valuable companies.

With more than 430 million consumers, India is the second-largest smartphone market in the world after China. But while mobile phone users are happy with the rockbottom charges, there is still plenty of dissatisfaction with the poor quality of service.

Almost every part of India is plagued with calls dropping out, and it happens irrespective of the service provider or data plans. Another major bugbear is the difficulty in getting a call connected, which is especially common if the caller and the receiver happen to subscribe to different phone networks.

One reason cited is that the number of mobile phone towers has not kept pace with the boom in customer numbers. India has 461,000 towers across the country catering to more than 1.1 billion subscribers; China has more than 1.94 million telecom towers for a customer base of 1.4 billion.

This shortfall is unlikely to be bridged anytime soon, as the telecom sector is experiencing acute financial stress, possibly as a result of the heavy discounting. The industry has a combined debt of nearly eight trillion rupees ($114.22 billion), with older providers in the most trouble. Some,  including Tatas and Telenor, have already exited the industry.

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