Reliance Jio Unlikely to Achieve its Audacious Goals in the Broadband Sector: CMR

By July 10th, 2018 AT 7:15 AM

Reliance Industries held its Annual General Meeting on July 5, where it announced various products like the JioPhone 2, Jio GigaFiber and Jio GigaTV. The Mukesh Ambani led telco also made some big promises for the coming months. Also, it is undeniable that Reliance Jio has set very audacious goals for itself which seem almost impossible to achieve. A CMR report has come up highlighting that Reliance Jio might be lagging behind its big goal. Although the telco has set up some milestone for reaching a massive subscriber base, there has been no deadline provided by the telco for the same.

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During the AGM, Mukesh Ambani announced that Reliance Jio had amassed 215 million subscribers as of this month. In total, 125 million more subscribers have been added since the last AGM held in July 2017. Out of these 125 million, 25 million have been added through JioPhone, 5 million from JioFi and the remaining 60 million are smartphone users having a different brand of handset.

However, despite seeming like big numbers, these stats do not present a rosy picture for the reasonably new telecom operator. The India Monthly Mobile Handset report said that there were 116 million mobile shipments in the country, out of this only 60 million are accounted for by Reliance Jio which points out that things might not be as good for Jio as they look from the outside. As per CMR’s report, the cumulative shipments of JioPhone have been a little over 50 million. However, Ambani clarified that there are only 25 million JioPhones in use which tells us that the JioPhone fever amongst the buyers has died out after the initial extravagant use of the device. The higher price of the JioPhone 2, which will now come for Rs 2,999 and with minimal improvements over its predecessor has been expected to worsen the picture. The JioFi sales are as usual and do not add any substantial value.

Overall, the CMR report has highlighted that Reliance Jio’s goal of reaching 300 million subscribers might be a ‘herculean’ task. CMR has said that Jio might slow down after reaching the 250-260 million mark.

The CMR report also highlighted that Reliance Jio’s announcement of adding 50 million subscribers to its new GigaFiber service was absurd since there was no deadline mentioned for the same. The telecom giant did not specify when it expected to accomplish the aim of reaching 50 million broadband users. Given that the current number of broadband users in the country has been pegged to be 18 million only, amassing 50 million broadband customers by a single telco seems like a highly unlikely event.

The report predicts that owing to the early adopters, Reliance Jio might be successful in adding half a million subscribers under GigaFiber services in its first year. Citing that video remains the favourite form of content for Indian internet users, the report said that the buyers are likely going to opt for the GigaTV services alongside GigaFiber. The total initial cost for both the services combined was estimated to be Rs 5000. Also emphasising the data, the report debunked Jio’s goal setting to be ‘hypothetical’ saying that Reliance Jio plans to lay claim on more than half the broadband users of the country which is very unlikely to happen.

Lastly, it is worth keeping in mind that replicating the success of Reliance Jio’s early days is an arduous task for Reliance Jio itself. India as a country is a hard market to penetrate, even with high potential devices like smartphones. In such a scenario, the telecom companies and the tech giants will have to tread with patience, since there is a limit to how fast the people will adopt. The CMR report brings a realistic picture into the scene demarcating what Reliance Jio can and cannot achieve.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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