Reliance Jio had been in news much before than the services were even released. Post launch, the company offered various free services to its customers as a welcome offer and gained 16 million users within a month’s time. These free services included unlimited 4G data, access to exclusive apps and unlimited voice calls and SMS that were free till December. But due to massive popularity and achieving almost 50 million users of Jio, these services were extended till March’17. The extension was named as ‘Jio Happy New Year Offer’ for its customers. Further, Jio has also managed to register over 6 lakh users every month since its launch in September.
Apart from the free services, easy e-KYC and sign-up process also led to its craze in India. The company also introduced Aadhaar-based paper-less SIM activation across 3,100 cities and towns back in October as a step towards enhanced customer experience. With the ongoing efforts and marketing tactics, the company’s Infocomm subscriber base may surge upto 100 million by March’17. Fitch Ratings, an international ratings agency says that currently Jio has acquired 52-55 million subscribers and that could swell to 100 million by end of March with regard to its sound strategy of offering free voice, text and data services.
Though, the usage of same may face a downfall post 1 April when the company starts charging users for its services. Speaking on the same, Nitin Soni, Director at Fitch Ratings said,
So as long as it is free, even a customer who is a customer of Airtel or Idea will still take a free Jio SIM to enjoy free services for the next three months. But I think there will be some churn when Jio will start charging from April 1 and that churn may well reduce the subscriber base by 5-10 percent.
But price is not the only factor which plays a crucial role in determining the success of telecom companies. Voice quality, network range along with network’s stability and strength also hold due credibility. The company needs to work hard on this avenue as complaints regarding call drops and unavailable network has been witnessed by customers following the launch. Soni added,
And at that time, the customer will decide how much they are going to pay on a monthly basis to the telecom operator and if Jio at that time is cheaper than the incumbents, then they might as well shift to Jio.
However, Jio will be releasing some other services in coming months in an attempt to retain its existing customers and attract further customers. The company has given a tough competition to the existing companies such as Idea Cellular which does not have 100 per cent 4G spectrum asset on a pan-India basis. Further, Reliance is currently engaged in acquiring MTS alongside merging operations with Aircel. It is clearly visible that arrival of Jio has negatively impacted the low lying companies.
Though Airtel is a solid one to beat as the company has lot of spectrum asset on 900 MHz alongside being well placed, Jio is trying to conquer the market. Nitin commented here as,
And whenever a new entrant comes into this industry, it negatively impacts the weaker telecom company first. We believe that Idea could be well affected in the next 12-24 months and which is the reason we think that they could do some M&A activity to consolidate their position. We believe that data tariff will fall by 15-20 per cent because of competitive intensity coming along from Jio. But Airtel is a well established and entrenched incumbent in this market.
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