Jio Users May Continue To Get Almost Free Services Post March 31

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Mumbai: Reliance Jio subscribers may continue to enjoy data services at a nominal rate after March 31. The deal comes with free voice calls as earlier. It may be extended for other three months.The free trial was for six months as initially reported.

The Mukesh Ambani-owned operator is working out a new tariff plan which will be valid till June 30, said people familiar with the developments in Jio as well as analysts. Unlike the earlier free offers that incumbent telcos have termed predatory, the latest introductory offer will charge a fee of about Rs 100 for data, while voice will be free. “We have to start making revenue,” one of the persons mentioned above said.

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The company’s free voice and data offers have attracted over 72 million subscribers in four months after its commercial services were launched on September 5 last year. India’s top telcos, Bharti Airtel, Idea Cellular and Vodafone India, have been forced to slash data and voice rates – even offering voice for free under some plans – to counter the aggressive pricing offered by Jio. The newest entrant offers only 4G services and has claimed its affordable services will trigger.

Instead, a nominal charge will help Jio test its subscribers for stickiness, and will also get an indication of a suitable price point when it finally starts charging at market rates.

“We expect many will go back to using their primary number if the (free) offer is withdrawn, and Jio could well lose over half its subscribers if it starts charging more without fixing the call drop problem,” said Chris Lane, a senior analyst at US brokerage, Bernstein. Offering a nominal price for data – lower than what it had announced in September -with voice free may prevent a sharp drop in customers, and the operator can still start its payment cycles, said analysts.

But it has to come up with cheaper tariff because other incumbents have already launched reduced packs. This price war is a burden on the company (telcos) and the government loses on licence fee as well,” said an analyst who preferred anonymity.

 

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