Reliance opens another line with Infocomm launch
TIMES NEWS NETWORK[ SATURDAY, DECEMBER 28, 2002 04:21:23 AM ]
economictimes.indiatimes.com
The drab and grubby corner of Navi Mumbai, where Reliance Infocomm has its headquarters, got a boost of glamour and power on Friday when a string of leading industrialists, politicians and bankers turned out in strength to watch Reliance unveil its wireless in local loop mobile services.
They watched in awe and fascination as Prime Minister Atal Behari Vajpayee launched Reliance Infocomm through video link and Union communications and IT minister Pramod Mahajan inaugurated the various services.
On display was not just the basic telephony service, but also the wireless in local loop service backed by a dazzling array of hi-tech phones and dirt-cheap rates.
Present on the occasion were film-star turned politician Vinod Khanna, ICICI chief honcho KV Kamath and Anand Mahindra, vice-chairman of Mahindra & Mahindra.
They were there not just to watch the launch of a new cellular service, but also the transformation of a hitherto-purely industrial conglomerate into a consumer and retail focused service provider.
The Ambani family was present in strength, but Anil and Tina Ambani were conspicuous by their absence. There were different versions explaining their absence.
While Nita Ambani, the wife of Mukesh Ambani, said Anil was unwell, other company officials said he was in Delhi and would attend Saturday's function, where a stamp of Dhirubhai Ambani would be unveiled.
Reliance will offer WLL services from February after a country-wide demonstration campaign, which is somewhat similar to the sampling exercise of fast-moving consumer goods multinationals.
The rates are aggressive and intended to lure more Indians into using its mobile service. All incoming calls are free, while outgoing calls cost 10 paise per 15 second pulse and most value-added services are free.
Consumers can not just browse the net but also watch Bollywood film clips, capsules of cricket matches on the mobile screen and access news services.
The company has also announced handset financing options, which are a part of the monthly tariff plans.
But Reliance Infocomm will not be able to offer roaming services to its subscribers, although it will offer the subscribers the choice of having a different number in every city that the subscriber may be travelling to.
Reliance Infocomm plans to have a muhurat on January 15, in the auspicious period after Makar Sankranti (January 14).
The membership for the Dhirubhai Ambani Pioneer Club will be open till March, after which it will be closed, and standard tariff will apply after that.
"We will review the tariffs every quarter," said Mr Ambani. ET reported on Friday that the Telecom Regulatory Authority of India has cleared Reliance's tariffs asking the company only to make incoming calls completely free.
Regarding conditions imposed by Trai, he said, "There are no other conditions except for free incoming."
In response to questions, he said, "We never had any plans to offer call forwarding". But, he said, that like in the old days, "we can offer 20 SIM cards that will travel over the air".
Initially, Reliance Infocomm plans to offer some two to three SDCA's (short distance charging area) free to its subscribers of the introductory scheme, Dhirubhai Ambani Pioneer Club. Those subscribers who want roaming will have to be happy with the data services.
Responding to a question about lack of roaming services for its high net worth subscribers, Mr Mukesh Ambani, chairman, Reliance Infocomm said, "The data services that we offer will be a delight for our customers".
The tariff plan announced today envisages a membership fee of Rs 3,000, besides a monthly fee of Rs 100 towards membership, Rs 400 towards service charges, and Rs 100 as financing charges for the instrument.
But if the subscriber opts to pay Rs 14,400 at one go, which is the Rs 400 service charge for 36 months, then he gets the handset free, that is, he does not have to pay the Rs 100 (totally Rs 3,600 for 36 months) financing charge for the handset.
On the issue of the cellular vs WLL controversy, which has been referred to TDSAT, Mr Ambani said, "We have the government mandate to go ahead. No enterprise can be stopped in delivering value to customers."
Mr Ambani said Reliance Infocomm is planning to enrol two lakh young entrepreneurs to market the company's product and services.
Addressing a press conference before the launch of Reliance Infocomm's operations in Mumbai on Friday, Mr Ambani said that these entrepreneurs, called the Dhirubhai Ambani Entrepreneurs, will also market other Reliance group products like cooking gas and insurance in the future.
Reliance Infocomm is expected to complete the bookings for a spectrum of services, launched under the introductory Dhiurbhai Pioneer Club programme, by March '03, Mr Ambani said.
"We are starting the demonstrations across the country on January 15. We have tied up with multiple vendors to provide up to 8m handsets by March," he added.
Outlining the business strategy, Mr Ambani said that Reliance Infocomm expects to make profits in the very first year of operations. "We expect to give a fair return to investors in the first year itself. We are on track right now. We will get the right picture in the next six months," he added.
He said the company expects to gain 15-20% of the mobile phone market by '04, Reliance Infocomm is launching the mobile services under the banner of Reliance India Mobile Services.
Explaining the market potential in India, Mr Ambani said that while China has a market size of 300m handsets, India's market is just evolving. Hence, there is a room for a lot of players in the Indian market, he added.
Answering a query on investment by a strategic investors, Mr Ambani said that overseas telecom major Qualcomm has the option to invest around $200m in the company.
"Both of us have to decide as to when the option can be exercised or not to do it at all," he added.
Reliance Infocomm is planning to invest around Rs 25,000 crore for its broadband network and the company has already committed around Rs 11,000 crore till now.
The company has also far raised Rs 9,000 crore through equity and Rs 6,000 crore via debt for the project, he added.
He said Reliance Infocomm will challenge the conventional cost structures in the telecom industry. Calling the launch as the beginning of a new way of life, Mr Ambani said that Reliance Infocomm will change the perception of time, distance and space.
Reliance Infocomm will make a modest contribution to help India to take the mantle of leadership in the knowledge era. "Just one million professionals earning around $20 per hour can generate an economic output of $40bn every year, he added.
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They've locked up 8 million handsets by March. That bodes wellto make their estimate of 10 million by EOY<g>. |
