Tough race for RJio to reach target of 100 million users

NEW DELHI: Is Reliance Jio Infocomm Ltd (RJIL) losing its plot of reaching 100 million users in the shortest possible time?

The way its plot is progressing till now, it seems way off that number. An analyst with an advisory firm, who did not want to be named, said his internal target for Jio’s user base was around 50 million by the middle of next year.

He, however, expects Reliance Jio to hit a wall after that as incumbents would by then be geared up to combat its moves in the market.

“Towards the middle of next year is when Jio will start hitting into a wall. Right now what’s happening is it’s not cannibalising other telcos (telecom companies) much but is mostly attracting fresh people,” he said.

The telecom expert further added; “The effect (of Jio’s entry) will start showing in 2017, and that’s when the telcos will start combating it as well. So, I think you will see the market organising itself to combat Jio sometime in the middle of next year, when they (Jio) hit a wall round the 50-60 million figure”.

On September 1, billionaire Mukesh Ambani set an ambitious target of 100 million subscribers on Jio network “in the shortest possible time, and set a world record” by covering 90% of India’s 1.2 billion population by March 2017.

However, there are already widespread grievances on social network platforms on the quality of its data services declining and its free SIMs being sold in the black market. DNA Money had reported on how buyers of Jio’s free SIMS were being charged between Rs 50 and Rs 500 from mobile stores across India.

“This negativity publicity could adversely affect its market,” said an analyst.

A statement issued by RJIL recently claimed it had crossed 16 million subscribers in the first month of its operations. Going by this pace of growth, it does not seem that target would be achieved any time soon. A Moody’s report does not see RJIL achieving its initial target of 100 million before March 2018.

Another telecom expert said incumbents Bharti Airtel and Vodafone were “well-equipped” to fight back Reliance with equally attractive offers. This, he said, could also see Jio’s march towards the 100-million mark slow down.

“I do see a strong fight from Airtel and Vodafone, in particular. I would certainly say Bharti and Vodafone are well-equipped. I am not sure of Idea, to be honest with you. Idea looks vulnerable,” he said.

A month ago, during RIL’s AGM, Ambani announced that Jio users would never be charged for fourth generation voice over long term evolution (4G VoLTE) services and priced his 4G LTE data services at approximately a third of what incumbents were charging then. Reliance Jio’s services will become paid from January next year.

Most existing telecom operators are already gradually pulling down charges for data to Jio’s level. Even its iPhone7 offer, where it is offering services worth Rs 18,000 for free for one year and other discounts for fourth generation (4G) services, has been countered by Airtel.

And, if Jio fails to reach its 100-million target soon, it will have to reconcile to being the fifth largest player in the telecom market after Airtel (250 million), Vodafone (200 million), Idea Cellular (175 million) and Reliance Communication (+Aircel+MTS) (130 million).