Jio is anticipated to unleash disruptive 4G data price plans to poach top-end data customers from incumbent carriers such as Bharti Airtel, Vodafone India and Idea Cellular in urban markets, according to an analyst at a leading European brokerage, quoted by an Economic Times report.
The report said that these data customers are likely to generate bulk of Jio's revenues in future. The analyst said that data average revenue per unit (ARPU) will be the principal driver of its overall customer revenues that will also include voice ARPU, since 100 per cent of Jio's subscribers will be data users unlike those of incumbent telecom operators.
Another brokerage firm, CLSA, expects that the Mukesh Ambani-owned telco’s target market will be large enough, given the rising 4G user base in the country. The firm, in a note, said that the 4G phone population in India is slated to rise to 500 million in five years. CLSA also expects the base of subscribers generating ARPUs upwards of Rs 300 to increase to 300 million in three years from the current level of 165 million. It added that ARPU will rise as faster data speeds boost data usage.
In order to acquire as many as 265 million subscribers, which is over Bharti Airtel's current mobile user base of 254 million, Reliance Jio is may need to generate a 10 per cent pre-tax return on capital employed (RoCE) by the fifth year, according to the brokerage firm, which also said that higher 4G data usage will allow the Mukesh Ambani-owned telco to achieve Rs 250 level of average revenue per unit (ARPU).
Reliance Jio, which already serves to over 7 lakh subscribers in the country, may start operations by September this year following rigorous testing of its network and services. As per media reports, the average data usage per subscriber of Reliance Jio stands at 18.6 GB, which translates into a total usage of 13 million GB.
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