Jio’s Poor Run at Adding Active Users Can Delay Tariff Hikes: Report

Reliance Jio aims at adding users at scale and doesn't care too much about the ARPU. The telco has priced its plans lower than Airtel's offerings to attract more users. Jio would likely want to regain the pace at which it used to add subscribers. A tariff hike would be a hinderance in adding more users. It could have a negative effect in the subscriber base and that is why Jio could delay the increase of prepaid tariffs.

Highlights

  • Reliance Jio has been quite slow at adding active users compared to Bharti Airtel in the last several months.
  • November 2022 was a shock for the industry as Jio lost 2 million active users MoM (month-over-month).
  • Along with that, in Dec 2022, when Airtel added close to 6 million active users, Jio added only 3 million active users.

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Reliance Jio

Reliance Jio has been quite slow at adding active users compared to Bharti Airtel in the last several months. November 2022 was a shock for the industry as Jio lost 2 million active users MoM (month-over-month). Along with that, in Dec 2022, when Airtel added close to 6 million active users, Jio added only 3 million active users. The slow rate at which Jio is adding active users is not only affecting its average revenue per user (ARPU), but also the subscriber market share. Thus, the telco wouldn't want to raise tariffs right now as it would only hurt the active subscriber addition further. Unless Jio goes ahead with the tariff hike, Airtel and Vi (Vodafone Idea) can't do it either.




Read More - Jio Launches 5G in 20 More Cities, Takes Total Count of 5G Cities to 277

Airtel and Vi want to increase tariffs. It is important for improving the ARPU and overall revenues. According to a report from the Financial Express, brokerage house Jefferies said that during the six-month period ending Feb 21, Jio's active subscriber adds were lower than Bharti by 20 million, which resulted in Jio bringing bundled offers for feature phone users on March 21. Jefferies believes that underperformance in Jio's user additions compared to what Bharti is doing will result in replayed tariff hikes.

Read More - Jio Brings 5G to 17 More Cities of India

Reliance Jio aims at adding users at scale and doesn't care too much about the ARPU. The telco has priced its plans lower than Airtel's offerings to attract more users. Jio would likely want to regain the pace at which it used to add subscribers. A tariff hike would be a hindrance in adding more users. It could have a negative effect on the subscriber base, and that is why Jio could delay the increase of prepaid tariffs. If Jio delays hikes from its end, Airtel and Vi won't have any other option but to play along.

It is worth noting that Airtel has hiked the base tariffs in 19 circles of India. The telco added users in the two states it initially hiked the base tariffs in. That has been a positive development for Airtel, and it will likely make the new base plan the Rs 155 option in the remaining two circles as well.

Reported By

Tanuja is a passionate technology and telecom buff who has been following the telecom industry for several years now.

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