reliance jio offers india

The announcement and subsequent launch of Reliance Jio in the August of 2016 shook the Indian telecom industry and changed its landscape in numerous ways. The launch was highlighted with an unbeatable introductory offer which included free voice and data services for a limited period up to March of 2017. This led to an unprecedented rate of consumer adoption, and as of 21 February 2017, Reliance Jio has met its initial ambitious 100 million subscriber target in record time.

A large portion of the credit for the rapid expansion of the Jio network has to be attributed to the free voice and data offers. However, all things must come to an end, especially considering that free model of primary service is not a sustainable business practice in the long term. The industry has been anticipating the shift of the Jio service model from free to paid for a while now, and now with the announcement being made, the industry is bracing for its impact. The most pertinent question seems to be can Reliance manage to maintain its momentum and convert its free users to paying customers?

Let’s dig deep to get some idea on Reliance Jio future.

Reliance Jio: Shift in the Strategy

Mukesh Ambani, Chairman of Reliance Industries, announced on 21 February 2017 their plans to shift to a paid subscription model from 31 March onwards. Central to this new model is the new Jio “Prime” subscription.

According to Indian Express, the Prime membership will be available to all current Jio subscribers from the 31st of March at a nominal subscription fee of Rs 99 per year. All subsequent Prime members will be able to continue to enjoy all current Jio benefits for Rs 303 (excluding taxes) per month. The package will include unlimited free voice calls and text messages, along with unlimited data (with a FUP limit of a max of 1 GB per day).

This comes as a direct response to the new aggressive pricing schemes introduced by Airtel, which is currently the leading service provider in India. According to NDTV, under the new plans, Airtel is offering its postpaid subscribers an additional 10 GB of data for Rs 100. This amounts to Rs 10 per GB, roughly the same as what Jio is offering. However, the caveat here is that you are required to have an existing paid Airtel postpaid plan with a nominal amount of data to avail the new plan. At the time of writing, this offer is also not applicable for prepaid users.

Reliance Jio has a lot of momentum going for it at the moment. Overall Reliance’s market share in the telecom industry has risen from 9.93% in February 2016 to 14.08% as on December 2016. The unprecedented growth of Reliance is primarily driven by the exploded adoption of Reliance Jio, which has risen from zero in August to 6.4% market share by the end of December 2016 – the fastest growth of any telecom provider in the India.

The subscribers’ count of Reliance Jio has crossed the 100 million mark with continuing rapid growth and competitive pricing. The new prime service announcement has also been met with tempered enthusiasm, with shares of Reliance Industries rose by 1.36%, and rivals Airtel and Idea Cellular’s shares depreciating by 4.02% and 0.37%, respectively, in the stock market.

Reliance Jio: Ready For the Future

With two times the number of 4G base stations compared to all other operators combined, Reliance Jio has the infrastructure to grab the lion’s share of the market in the coming years. Reliance has laid out fibre optic cable networking covering 350,000 km as against of 49,000 km by Airtel. In many remote areas and Tier-2 and Tier-3 cities where other network providers are yet to stabilise their 3G network, Reliance Jio is penetrating fast by riding on the back of wide network connectivity and future ready network.

According to Ambani, over 100 crore GB of data was consumed on the Jio network over the past few months, mostly in video format, making Jio the largest video data network in the world. They also outlined plans to double their network reach by the end of 2017 and provide coverage to up to 99% Indians. Jio has also stated plans to set up a monitoring team to keep a close eye on competitors’ prices all across India. Reliance, however, looks undeterred by the latest offers introduced by Airtel and Vodafone to compete with Reliance Jio. The company claims that they will not only match these offers, but they will also provide 20% more data to strive to be the most value-for-money service.

It’s no brainer that future of smartphone and voice calling belongs to VoLTE (Voice over LTE). And, that’s why almost every smartphone manufacturer is emphasising on VoLTE capabilities their devices offer in their marketing campaigns nowadays. According to internal data presented by Reliance, there are little over 13 million active VoLTE smartphones in India by the end of January 2017, of which Reliance Jio is activated on nearly 10 million devices. Reliance Jio network and its own device brand LYF are VoLTE ready. The superior call quality offered by VoLTE is the biggest reason mobile carriers, device manufacturers and users are upgrading themselves to VoLTE environment.

It’s An Uphill Battle for Reliance Jio

Not all, however, appears rosy for Jio. According to DNA India, analysts are sceptical about Reliance Jio’s ability to retain customers after the shift to a paid model, with some predicting a 50-60% reduction in customer base after the move. Jio also faces some tough competition from Airtel and a possible merger between Idea Cellular and Vodafone (which would make them the largest telecom company in India). This coupled with the multitude of network quality issues faced by Jio has led many analysts to conclude that Jio will fail to keeps up its momentum.

Reliance Jio may not be financially distressed like many other telecom network providers, but to create a self-sustaining telecom business in India may be challenging, considering the type of plans Reliance Jio is offering to users. With the initial investment of 150,000 Cr. and an additional investment of Rs 30,000 Cr., generating ARPU (Average Revenue Per User) of over Rs. 200 may be quite challenging. Just to put things in perspective, the average ARPU for access service for operators in India hovers Rs. 175, with Airtel leading the pack with Rs 194 for mobile services and Rs. 196 for data services.

Many other major hurdles and problems are plaguing the service. Throughout its short lifetime so far, there have been call quality issues with numerous complaints of dropped calls and poor call quality complaints. According to the recently released study by Truecaller, call duration on the Jio network ranks lowest among competitors. As for 4G speeds, once again Jio find itself at the bottom of the pile with average speeds of 8.345 Mbps. Airtel tops the list at 11.862 Mbps average speed, followed by Idea at 10.562 Mbps, and Vodafone at 10.301 Mbps.

The war for telecom service dominance is heating up. Who will come out on top is something only time will tell.