Reliance Jio May Witness a 15 Percent Increase In Subscriber Share Within Four Years

Reliance Jio Infocomm is expected to see a considerable hike in subscriber share in approximately four years according to analysts. They stated that the company intends to achieve a target 15 percent share by offering consumers efficient 4G services at affordable rates.

Incumbents at risk

Brokerage Company Marquarie Research stated in a report that Jio’s arrival in the 4G market is likely to jeopardize the stronghold of current incumbents and possibly dwindle their sales. Analysts have further predicted a steep fall in data prices (an expected drop from the current Rs. 0.23 MB to Rs. 0.1 per MB by end of this financial year), with operators battling it out to carve their niche among existing customers while also trying to lure potential ones.

The leading three incumbents, namely Idea Cellular, Bharti Airtel and Vodafone India may possibly lose out on subscriber share by 8 percent around FY17 to FY20. The average revenue per user of these operators may also get affected in the bargain.

Drop in data rates

Another report by HSBC revealed that data rates may fall considerable by 10-15 percent in the successive three months and could witness a further fall of 30 percent as March 2017 draws to a close. As per the report, companies are likely to focus on driving 2G users into 3G or 4G bandwidths, while simultaneously trying to introduce new smartphones in India.

Commencement of full-scale operations

Reliance is also gearing to open its high-speed network for everyone by December, which will exclude the need for an invitation. The invite program that was kick-started by the company’s employees offered free data services for invited members across three months. The services comprised Jio apps like Jio Mags, Jio On-Demand, Jio Beats, Jio Security, Jio Drive and JioXpressNews.  The same could only be availed of on purchase of a LYF smart phone; however, SIM card distribution is most likely commence from the 30th of May. This scheme has now been extended for up to six months (offer will expire in November 2016).

Plans for a glitch-free launch

At an event held to discuss Reliance Jio’s quarterly results, the company revealed that it has acquired a customer base of 500,000 users through its testing phase, most of whom already owned LYF handsets. The telecom arm also aims to launch services for public consumption once it reaches a target of some million subscribers. Additionally, it wants to ensure a glitch-free launch through network optimization prior to full-scale operations.

Reliance through its unparalleled services has now emerged as the fifth largest smart phone brand in the country, all within only four months of its launch.  The company launched a range of handsets such as LYF EARTH 1, LYF WATER 1, LYF FLAME 1, LYF WATER 2, LYF FLAME 2, LYF WIND 4, LYF WIND 6 and LYF WATER 5 at varying prices to suit every budget. They are priced between Rs. 4,799 to Rs. Rs. 19,399. One of their newest offerings also include Smart LED TVs driven by Android OS ranging from Rs. 65,990 to Rs. 1,99,990.

Summary

Analysts predict that Reliance Jio may acquire a 15 percent subscriber share in four years.

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