On 1 July 2003, Reliance Infocomm lobbed a grenade into India’s telecom sector, offering handsets for just Rs 501. The ‘Monsoon Hungama’ offer allowed it to rack up over a million subscribers in just 10 days.

By the time, it realised that giving away stuff for free would only attract those who wanted free stuff, it was too late. The adverse selection would saddle Reliance with a low-paying, marginal user base that it would find impossible to outgrow later on.

AUTHOR

Rohin Dharmakumar

Rohin is co-founder and CEO at The Ken. He holds an MBA from the Indian Institute of Management, Calcutta and an engineering degree in Computer Sciences from the R.V.C.E., Bangalore.

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