World’s lowest internet tariff and $750m for startups: Reliance’s 2-in-1 offer to win India

Photo credit: Reliance Jio.

Indian business conglomerate Reliance Industries has a two-in-one offer to win over India’s internet consumers – data tariffs below one US dollar per GB for the new Reliance Jio telecom service, and a US$750 million fund for tech startups.

In a presentation at Reliance Industries’ annual general meeting yesterday, its chairman Mukesh Ambani said Jio data plans will work out to INR 50 (US$0.75) per GB – and half of that for heavy users. He pointed out this would be among the lowest data tariffs in the world, with the cost in neighboring China being US$15 per GB.

Incumbent telecom operators Airtel and Vodafone are reported to be scrambling to review their data tariffs which average out to around US$3.5 per GB. Besides, the Reliance Jio rolling out in the new year will have only 4G services.

That would be a boon for consumers who struggle with internet access speeds as well as tariffs when they are out of wifi zones.

Opportunity for startups

Photo credit: Reliance Jio.

Lower data tariffs have huge implications in India where consumers have got into the habit of turning off internet data on their smartphones to avoid reaching the caps in their data plans and then paying through their noses. This has in turn impacted the business models of internet consumer firms targeting the burgeoning smartphone users in the country. Now they will do a rethink as consumer behavior is likely to change if data tariffs drop to one-third of their current levels.

It’s the availability of affordable smartphones that triggered the boom in consumer internet startups over the last few years. Now, a second wave may be coming as data becomes affordable too.

“This will be a real game-changer as far as online content is concerned,” says Mayank Bhangadia, co-founder and CEO of Roposo, a social network for fashion addicts. Roposo runs a lot of video and user generated content. Mayank notes their users of 4G network spend thrice as much time on the platform as users on 3G. “Jio’s attractive offerings will escalate our user engagement manifold and will enhance customer propensity to spend more time on Roposo,” he says.

Jio wants a finger in the startup pie too. Mukesh Ambani also announced a Jio Digital India Startup Fund, for which US$750 million has been set aside. Jio plans to create entrepreneurship hubs in cities across India. Reliance already has a GenNext startup incubator in partnership with Microsoft Ventures.

See: India wants a data revolution, but its telcos can’t stop brawling