How Reliance Jio Became India’s Wireless Wonder

There’s a new king of telecom in India: Reliance Jio Infocomm, the wireless carrier created by multibillionaire Mukesh Ambani, which ranked No. 1 on last year’s Change the World list. The network had 331 million subscribers at the end of June, exceeding Vodafone Idea (320 million customers) for the first time. Owned by Ambani’s energy and retailing giant, Reliance Industries Ltd. (RIL), the telecom company could become the foundation of an online and e-commerce platform in India that rivals Alibaba in China and Amazon in the U.S., analysts at UBS predict.

It’s an amazing feat for the carrier, which started offering mobile service for free just three years ago before converting subscribers to still-cheap data plans in 2017. Currently, one Jio plan charges just three rupees per gigabyte of data used, equal to 5¢, and is ranked as the cheapest rate in the world.

To create the low-cost carrier, Ambani spent billions to build a thoroughly modern wireless network that supports only 4G standards, bypassing older 2G and 3G technology, and relies on the kind of routers and equipment used to build the Internet instead of on more specialized—and expensive—telecommunications switching gear.

Ambani’s wireless price war is eating his competitors. While Jio said net profit in the quarter ending June 30 jumped 46%, to $130 million, Vodafone Idea lost $690 million and third-ranked Airtel lost $410 million. Both had been profitable a year earlier.

Reliance has been expanding its offerings into e-commerce and cloud services, leading UBS analysts to make the comparison to top Internet companies. “Can RIL evolve into India’s Amazon/Alibaba/Walmart? Yes,” the analysts concluded. With Ambani’s deep pockets and willingness to cost-cut his way to industry domination, it’s certainly plausible.

A version of this article appears in the September 2019 issue of Fortune with the headline “India’s Wireless Wonder.”