Heralding in another price war that would bleed the incumbents further, Reliance Jio Infocomm (RJio) has extended its free offer for voice and data till March 31, 2017.

The operator is, however, limiting the free data usage to 1 GB per day, which is still higher than the industry consumption average. The existing 52 million subscribers will be automatically migrated to this new offer. RJio had earlier announced its free offer to end this month.

“Starting December 4, every new RJio user will get data, voice, video and full bouquet of applications free until March 31. We are calling this the ‘Jio Happy New Year Offer’ (JNO),” RIL’s Chairman and Managing Director, Mukesh D Ambani, said in an address broadcast live across various social media platforms.

However, for the industry, this was much on expected lines. On Monday, research firm CLSA had said in a report that RJio was likely to extend free services beyond December. The move would have an impact on incumbents in the fourth quarter.

Competitors impacted “With RJio offering free services, telecom operators have witnessed a slowdown in data consumption, as subscribers have preferred to access data on Jio’s free network. Initially, voice revenues of the incumbents had not been impacted, since RJio was facing voice calls interconnect issues, but with telcos providing additional points of inter-connection, the call setup issues faced by Jio has eased (from 90 per cent at the launch of service to 20 per cent currently),” Bank Of America Merrill Lynch said in a report.

“This is likely to put pressure on the voice revenues of the telcos till Jio’s welcome offer continues,” it said, adding the true impact on incumbent revenues will be known only after RJio starts charging customers, which is now pushed to April 2017. GV Giri of India Infoline said this will enable RJio to add more subscribers, with the rate of addition currently being 6 lakh per day.

“We think the lower daily cap of 1 GB (earlier 4 GB) will free up capacity and after factoring in ongoing capacity addition in both network and WiFi, we think RJio may have a decent chance of reaching 100 million subscribers by March 2017. Near term data traffic growth of incumbents will be under pressure. We expect Bharti and Idea stocks to remain under pressure for the present.”

Call drops on the rise However, inter-connection issues continued to plague RJio, with as much as 900 crore voice calls from RJio to the three largest operators being blocked in the past three months.

Ambani, who termed this “anti-competitive”, said that over the past few months, call block rates have come down from over 90 per cent to nearly 20 per cent.

“We are working with all our fellow operators to ensure that in the coming weeks, this will come below the specified grade of service, which is 0.2 per cent,” he added. An average RJio user was using 25 times more data than the average Indian broadband user, he said .

Payment solution RJio also announced the launch of the Jio Money Merchant Solution. This solution provides access to RJio’s suite of services, including customised offerings such as digital money, for a very important segment of the Indian economy.

This will enable digital transactions of all types, whether they at mandis, small shops, restaurants, railway ticket counters, for bus and mass transit, and even for person-to-person money transfers. “Jio believes that this offering will contribute significantly in realising the Prime Minister’s vision of transitioning to a cashless economy,” Ambani said, adding that the decision to demonetise high value currency notes was bold and historic.

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