But analysts say the Mukesh Ambani-led telco would find it far more difficult to poach historically stickier post-paid subscribers from its two rivals, given that mobile phone users already have access to a variety of content and large dollops of data.
Just over four years since its launch in September 2016, Jio, on Tuesday, unveiled a gamut of offerings for post-paid users, which include family packs and access to OTT platforms, a first from the telco which so far almost entirely focussed on prepaid customers. It is also offering in-flight connectivity for Indian travellers going overseas, free international roaming in the US and UAE, besides other offers.
"There can’t be a more opportune time to introduce JioPostpaid Plus. After having earned the trust of close to 400 million satisfied customers in the prepaid smartphone category, we want to extend our customer obsession to the post-paid category," Akash Ambani, Director, Jio, said in a statement.
Jio’s new plans range from Rs 399 to Rs 1499. Airtel’s post plans start at Rs499, while Vodafone Idea’s begins from Rs399. In September 2016, Jio had entered the telecom market with pre-paid offers which bundled in free voice calls with dirt cheap data, triggering rapid consolidation and revenue erosion. Backed by its cheaper pre-paid plans, Jio has rapidly outpaced its older rivals to emerge as the market leader within four years, with some 400 million users to Airtel and Vodafone Idea’s roughly 280 million each.
But Rajiv Sharma, head of research at SBI Caps, said that it won’t be as easy for Jio to get Airtel and Vi’s post-paid users to jump ship.
“Jio will have to offer more in its post-paid plans and build a stronger brand if it wants to compete with Airtel and Vi who have strong brand connect amongst post paid subscribers,” said Sharma.
That is also because nowadays, there is not much difference between a prepaid plan and a post-paid one. “In a culture where one is told of their mobile usage, the only difference is that in post-paid, there is more bundling of apps and data roll over. Even in case of data, it is adequate and no more an exciting feature. The apps that are offered are best suited for large screens.”
Interestingly, the new post-paid tariffs from Jio come in a time when both Vi and Airtel have been talking of the need to hike prices urgently to repair the industry’s financials. Jio is the only profit-making telco in India currently.
Until now, Jio, which had just one post-paid plan at Rs199, concentrated largely on the prepaid customers, who make up well over 90% of the telecom subscribers in India. For example, some 94.8% of Bharti Airtel’s around 280-million user base is made up of pre-paid customers, while that’s 92.3% for Vodafone Idea, out of a user base of under 280 million. The post-paid segment though contributes over 25% of industry revenue, as it brings in higher average revenue per user (ARPU) - a key metric.
Jio has an ARPU of Rs 140 compared to Vodafone Idea's Rs 114 and Airtel's Rs 157. It is also aiming to reach a base of 500 million subscribers and for that, post-paid tariffs will offer the telco an expanded target base.
Analysts say a reason for Jio’s lower ARPU compared with an Airtel is due to its low revenue generating JioPhone users, an issue it is now trying to fix.
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18 Comments on this Story
ANUBHAV KHANDELWAL32 days ago
because reliance beleives to end others business
i will never buy jio connection or buy anything o jio mart
cos they want to kill competetion and create monopoly....
Aaditya Kulkarni32 days ago
Infact people have started moving from JIO to Airtel because JIO's speed is pathetic.
SaBen 32 days ago
It's good that Jio has entered the telecom market otherwise it would have been a hell for the customers getting looted by Airtel/Voda/Idea cartel. At the same time it is always good for any sector to have a healthy competition or else the customers are doomed. Let's have Jio, Airtel and also Vi in the market, hope the Indian public will keep this in mind and will retain their Airtel or Vi connections instead of moving to Jio. Off late the service of Jio is going down also.