MUMBAI—India’s richest man is catapulting hundreds of millions of poor people straight into the mobile internet age.

Mukesh Ambani, head of Reliance Industries , EQRELIANCE 1.47% one of India’s largest conglomerates, has shelled out $35 billion of the company’s money to blanket the South Asian nation with its first all-4G network. By offering free calls and data for pennies, the telecom latecomer has upended the industry, setting off a cheap internet tsunami that is opening the market of 1.3 billion people to global tech and retailing titans.

The unknown factor: Can Reliance reap profits itself after unleashing a cutthroat price war? Analysts say the company’s ultimate plan, after connecting the masses, is to use the platform to sell content, financial services and advertising. It could also recoup its massive investment in the years to come by charging for high-speed broadband to consumers’ homes and connections for various businesses, according to a person familiar with the matter.

Mr. Ambani’s project has the potential to give India the largest—and most diverse—connected population in the world, with low-cost access to data helping to level the playing field between rich and poor.

It also could revolutionize retail. Mr. Ambani’s success or failure could affect Alphabet Inc.’s Google and Facebook Inc.’s WhatsApp, which have poured resources into developing products for the Indian market, and Walmart Inc. and Amazon.com Inc., which have invested billions here on logistics for online shoppers. To profit, they all need people connected to the internet.

Mr. Ambani wasn’t available to comment, according to a Reliance spokesman. The company “has unleashed huge data potential in the country,” the spokesman said. “Digital life will no longer be the privilege of the affluent few.”

There are 390 million internet users in India, according to Bain & Co., but the penetration rate is still only 28%, compared with 88% in the U.S. The country’s e-commerce market is expected to be worth $33 billion this year, three times what it was in 2015, but less than 3% of India’s overall retail market, according to research firm eMarketer.

Companies are after customers like 59-year-old potato farmer Govind Singh Panwar. His home in the Himalayan foothills is built of mud and stone, and his village has no paved roads or indoor plumbing. Still, broadband internet has arrived.

“I bought our first fridge” online, Mr. Panwar said. “It’s a rare thing in a village.”

He got online last year with Reliance Jio Infocomm Ltd., Mr. Ambani’s telecom company, which built a tower nearby that beams his phone nearly unlimited 4G data for about $2.10 a month.

Jio, which means “to live” in Hindi, has signed up 215 million subscribers since it went live in 2016, making it India’s No. 4 mobile provider, after Bharti Airtel Ltd. , with 345 million, Vodafone GroupPLC and Idea Cellular Ltd.

Mr. Ambani’s foray started in 2010, when he bought a company that had just acquired a pan-India 4G license. That was a risky move at a time when fewer than one in 10 Indians were online. Airtel and Vodafone were still focused on rolling out 3G services, and few Indians owned 4G-capable smartphones.

Fourth generation, or 4G, networks provide significantly faster speeds than 3G, enabling more content like streaming video and music. They also provide the steadier connections important for online shopping, which can be difficult on patchy networks. 4G networks are common in the U.S., Europe and East Asia.

Mr. Ambani, now 61 and worth more than $48 billion, had just finished building what some have dubbed the world’s most expensive home, a 27-story mansion on a hill with views of the Arabian Sea. It was packed with bling—helipad, home theater, gym, garden, pool—but the internet connection was bad.

When his daughter came home from Yale University during a break, she struggled to submit her course work online. “Dad, the internet in our house sucks,” she complained, according to a story Mr. Ambani later recounted at an event. 

At the time, India’s telecom industry executives and analysts agreed there was need for more speed, but they doubted enough people would be willing to pay for it. Indians then were spending only about $2 a month on their cellphones, the vast majority of that on voice calls.

Some rivals began rolling out 4G services in some cities, but Mr. Ambani wanted to build a network that would also cover more than 18,000 cities and towns and 200,000 villages, touching some places that didn’t have electricity yet. That required more than 200,000 cell towers and 150,000 miles of high-tech fiber-optic cable, enough to encircle the Earth six times, according to the company and people familiar with the matter. The construction is essentially complete. Wading through India’s infamous red tape required as much time as the physical infrastructure.

To protect its sprawling web of cables, Reliance hired a national network of ex-army staff to look after its lines. It left a few feet of spare cable coiled on top of manhole covers to show thieves looking for copper that the mostly plastic materials weren’t worth pulling out, and local people were paid to keep an eye out for any problems.

“They had audacity, execution, and were financially capable to pull it off,” said Ankit Agarwal, chief executive of telecom products at India’sSterlite Technologies Ltd. , which supplied and helped install the fiber.

At the launch of service in September 2016, Jio made phone calls and text messages free for subscribers, and made unlimited data free for the first three months, eventually extending it to six months. After that, Jio’s data price would be a quarter the industry average.

“India will change forever,” Mr. Ambani said at the ceremony, in an hour-and-a-half long speech broadcast live on local news channels.

Jio’s competitors slashed rates, cutting average data prices in the country from more than $3 a gigabyte before Jio’s launch to about 60 cents now. Rivals have questioned the pricing campaigns with regulators and have charged Jio with predatory practices. India’s antitrust regulator said last year Jio’s free services didn’t constitute anticompetitive actions.

Subscribers in India typically use prepaid plans without contracts, making it easy to switch carriers by swapping in a new SIM card from a competitor.

One adversary that has thrown in the towel: Reliance Communications Ltd., formerly part of the Reliance empire but taken separate by Mr. Ambani’s brother, Anil Ambani, after a family dispute. The company, under pricing pressure from Jio, closed its mobile business in late 2017.

The price war has cut industrywide revenue per user—now averaging $1.53 a month, compared with about $2.50 in 2016. Jio beats the average, at $1.89 a month, but the number has been falling since its launch.

The result has been a data binge. Jio transmitted more data in the first year of its operation than any carrier ever world-wide, according to research firm Strategy Analytics. India last year surpassed the U.S. in the number of apps downloaded from the Google Play store, according to mobile-app analytics firm App Annie. Monthly data traffic in India per user has jumped 570% in the two years since Jio launched, according to Morgan Stanley .

When Jio realized it was reaching the consumers who could afford the data but not the 4G-enabled smartphones, it built a new type of “smart” feature phone that worked on 4G and had some smartphone features. Consumers could own a JioPhone for a $23 security deposit—refundable if they return the phone. It launched in September 2017 and has overtaken Samsung Electronics Co. to capture 47% of the feature phone market, according to research firm Counterpoint.

Companies such as Amazon.com are depending on the new pool of users. Amazon has tweaked its model in India by introducing services like cash on delivery, in which customers can pay with cash when items arrive at their door, since few people have credit cards. The retailer has also deployed swarms of delivery men on motorbikes, so they can negotiate chaotic city traffic.

Google, which has been effectively shut out of China since 2010, has been rolling out new features to cater to users in India, testing products that might also work in other emerging markets, such as Indonesia. It launched a version of its YouTube app, called YouTube Go, designed to work on inexpensive smartphones. It created a mobile payment app for India, called Tez, that works without a credit or debit card. It is also working to make many of its services work with local languages.

Jio “has been transformational in India,” said Josh Woodward, a Google product manager in Mountain View, Calif., who has led teams building new web services for the country. “Hundreds of millions of users are now going to come online faster than all the models projected.”

For Facebook’s messaging app WhatsApp, India is a critical marketbecause it has more than 200 million users here, more than any other country. Users who have never used email or Facebook can easily sign up for the app just by supplying their mobile phone number. WhatsApp is testing a mobile payments feature here and hopes to roll it out in other countries.

Walmart cited the expansion of people getting online in its decision in May to spend $16 billion to take over Flipkart Group, India’s largest e-commerce company. And Netflix now has around half a million subscribers in India, according to data-analytics firm IHS Markit ,where it is the highest grossing app on Google Play and Apple ’s App Store. “We hope someone would do a Reliance Jio in every other country,” Netflix Chief Executive Reed Hastings said in March to an Indian news outlet.

Mr. Ambani, who inherited control of the Reliance empire when his father died in 2002, has said he wants to broaden Reliance away from its focus on oil. The conglomerate constructed the world’s biggest oil refinery, and it is the world’s largest producer of polyester fiber and yarn. The group has annual revenue of more than $57 billion and also sells gasoline, finished garments and groceries, among a wide range of other products.

Analysts said Jio could eventually start charging for some of the services it now includes free. Among the bundled services it now provides subscribers are apps such as JioTV, which has more than 500 channels; JioCinema, which carries a variety of Indian films; JioMusic, containing songs in 17 languages; JioMoney, a digital payments service; and a messaging app called JioChat.

“The whole management team was clear that Jio was not a competitor to Airtel but to Google and Netflix,” said an executive who worked at Jio in the run-up to its launch. “I’m not building a telco, I’m building a digital platform company,” Mr. Ambani said, according to another Jio executive.

“Connectivity is the start, then you start building services on top of it,” said Tarun Pathak, an analyst at research firm Counterpoint. Jio is also pushing into home broadband services, which Mr. Pathak says is a “big opportunity” to boost their subscriber base to 400 million users, all connected to Jio’s various services.

Mr. Ambani has been hands-on throughout the rollout, according to people familiar with the matter, and still sits in on weekly meetings, weighing in on complex matters such as wavelength division multiplexing technology, which increases the carrying capacity of fiber-optic systems.

He first roughed out his idea for the 4G project in a 36-page, handwritten memo to his managers that was reviewed by The Wall Street Journal. It had mathematical calculations on data speeds and promises of “99.999%” network availability.

On a recent day at Jio’s sprawling tree-lined headquarters on the outskirts of Mumbai, its young staff of more than 25,000 zipped around the campus on shared “Jio Bikes” and ate food from vegetarian food trucks near the company’s cricket stadium. Posters of Mr. Ambani and his father were scattered around the complex. In one men’s bathroom, a sign on the mirror said, “You are looking at an innovator!”

To celebrate the start of testing for the network in late 2015, Jio threw a party in a packed arena at the headquarters. Bollywood superstar Shah Rukh Khan drove up the red carpet on a motorcycle, jumped onto a hoverboard and then took a selfie with Mr. Ambani.

At a July investors’ meeting, Mr. Ambani made his ambitions clear. “Even after serving the needs of our 215 plus million customers, the capacity utilization of the Jio network is less than 20%,” he said. “We are determined to connect everyone and everything, everywhere.”

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