Tech Telecom

With the commercial launch of Reliance Jio services on September 5, 2016, the telecom operator introduced ‘Welcome Offer’ with free voice and data benefits up to December 31, 2016. Jio had hoped that by then it would be able to resolve the interconnection issues with other carriers. Failing to do that, the company extended the ‘Welcome Offer’ till March 31, 2017 by relaunching it as the ‘Happy New Year Offer.’ Now, if latest reports are to be believed, the company is working on a new tariff plan that could further extend the validity of freebies till June 30, 2017.

In the span of four months the company has attracted over 72 million subscribers. Due to aggressive pricing offered by Jio Bharti Airtel, Idea Cellular and Vodafone India, have been forced to slash data and voice rates – even offering voice for free under some plans.

But for most of its 72.4 million-plus subscribers, Jio is still not the primary phone connection and the telecom operator runs the risk of losing them if it increases its rates significantly.

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.

Even after disrupting the telecom space and having over 70 million subscribers, the company doesn’t seem to be done yet.Jio is reportedly eying the feature phone market, and is expected to launch a VoLTE enabled phone under Rs 1,500. The alleged photo of the phone was recently leaked, showing off dedicated buttons forJio apps like MyJio, JioTV, JioCinema and JioMusic.

With the company banking on its app eco-system and content services, getting these apps on a feature phone with access to unlimited live TV, movies on demand and music streaming could turn out to be a masterstroke for the telecom operator.

“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.

Last month, Reliance decided to invest Rs 30,000 crore into Jio to expand its network, in addition to the Rs 1,71,000 crore it has already invested. Jio’s gross debt stood at Rs 49,000 crore as of December 31, 2016, with deferred payment liability of Rs 21,000 crore to the government for spectrum purchases.

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