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Reliance Jio makes encouraging start to paid services

Around 72 million subscribers have joined the Jio Prime loyalty program, which has been extended till April 15

Published: Apr 1, 2017 03:49:27 PM IST
Updated: Apr 1, 2017 03:58:30 PM IST

Reliance Jio makes encouraging start to paid servicesJio, the fourth-generation broadband wireless digital services company, has enrolled over 100 million subscribers on its network since launching commercial operations in September 2016
Image: Shutterstock.com (For illustrative purposes only)

Reliance Jio Infocomm, the telecom arm of oil-to-yarn and retail conglomerate Reliance Industries Ltd (RIL), has made a strong start towards migrating to a paid services regime by onboarding 72 million of its existing customers to the Jio Prime loyalty program.

Jio, the fourth-generation broadband wireless digital services company, has enrolled over 100 million subscribers on its network since launching commercial operations in September 2016. Around 72 million of these have paid Rs99 to become Jio Prime members. As members of Jio Prime, subscribers can pay Rs303 per month to enjoy unlimited voice and data services for the next one year.

“Considering the unprecedented demand for enrolling to Jio Prime and doing the first recharge, Jio has extended the deadline for purchasing Jio’s Rs 303 (and other) plans till April 15,” a statement issued by the company Friday evening said. “This extension will provide the necessary breathing room for users to avoid service disruption during the transition from free to paid services.”

The telco also stated that customers who couldn’t enroll for Jio Prime by March 31 for whatever reasons can still do so by April 15 by paying Rs99 and the first purchase of the Rs303 and other plans. The telco also announced the Jio Summer Surprise scheme for its Prime members whereby subscribers who make their first recharge prior to April 15 using the Rs303 plan (or any other higher plan) will get services for the initial three months on a complimentary basis and the paid tariff plan will be applicable only in July.   

“Jio has created the world’s largest greenfield 4G LTE wireless broadband network, with over 100,000 mobile towers. And we will add another 100,000 towers to our network in the coming months. This greenfield investment – of over Rs 200,000 crores – is the largest anywhere in the world,” RIL chairman Mukesh Ambani said in a letter addressed to Jio users. “We are acutely aware that we have small pockets of congestion on our network. With our investment in network expansion, you will see a dramatic improvement in service quality in the coming weeks.”

A back-of-the-envelope calculation provided an indication of the extent of revenues that Jio may earn for the first full year in which it offers paid services. Taking into account the Rs99 that these 72 million users have paid to become Jio Prime members and assuming they pay at least Rs303 per month for the next nine months (since services till July are free for those recharging before April 15), Jio could earn around Rs20,343 crore in revenue for the year ending March 31, 2018.

The caveat to this is that the actual number of paid subscribers will vary since Jio may add new subscribers till April 15, and not all Jio Prime member may continue recharging their connections every month. Also, not everyone may go for the Rs303 plan. Jio has other plans that sit lower (such as the Rs149 plan) and higher than the Rs303 benchmark (like Rs499, Rs999, Rs1,999) offering different quantities of free data usage, which will influence the exact turnover that Jio realizes from its paid services.

“A lot of people have migrated to the Jio Prime plan since it only cost Rs100, which was a small price to pay when the savings on their monthly mobile bills that they have achieved over the past few months is considered,” says Faisal Kawoosa, lead analyst at Cyber Media Research. “But a lot will depend on how many people continuing recharging their subscriptions every month and at what price.”  

(Reliance Industries is the owner of Network 18, publisher of Forbes India)

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