Reliance Jio locks horns with telcos over use of old Rs 500 notes for mobile recharges

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Reliance Jio has criticized the government's move to allow old Rs 500 notes to be used for pre-paid mobile recharges till December 15, locking horns with other Indian telecom operators that opined that not allowing such a move would impact their revenues sharply.

The Mukesh Ambani-led company has said that this move will be misused at the retail level, according to a report published in the Economic Times. Industry watchers have voiced Jio's concern as genuine, given the lack of clarity on the issue, and the move can fuel money-laundering operations as retailers could run exchange services and earn commissions on multiple top-ups with old notes.

An industry executive told the publication, "A truant retailer in a Tier 2/3 town or a village can easily prey on an ignorant customer by saying that the government is only allowing top-ups up to Rs 500, but that he is ready to offer multiple recharges for a commission to help them dispose of defunct cash".

However, GSM industry body COAI dismissed the concerns by saying that the government's decision to allow old Rs 500 notes to be used for pre-paid mobile recharges will address difficulties being faced by consumers, and allow them to continue using mobile services without disruption.


In case of the misuse due to the move, the report said, that prepaid users of incumbent telcos will load up with talktime for a few months in advance, reducing the immediate appetite for Jio’s offerings, and ultimately impacting Jio's user acquisitions efforts.

Reliance Jio has already garnered 52 million users in India and is aiming to get 100 million users in shortest time. It recently extended its free services for existing and new users till March 31, 2017 through 'Happy New Year' plan.

The government allowed old Rs 500 notes to be used for pre-paid mobile recharges on November 29. The recharges and top ups for pre paid mobile services had fallen 30-50 percent as consumers struggle with less cash in hand in the aftermath of the government's move to scrap old Rs 500 and Rs 1,000 notes, according to industry estimates.

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Telecom Analyst

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.


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