It was a surprising thing for many to see Reliance Jio’s subscriber base declining after years in the September quarter. For the unaware, Jio lost as many as 11.1 million subscribers in the quarter ending September 2021. No one ever expects Jio to lose subscribers in a quarter, not even the telco’s competitors. So what caused this decline in the numbers? Here’s everything you should know.
Reasons Why Reliance Jio Lost Subscribers in the September 2021 Quarter
According to ICICI Securities, Jio had cleaned its inactive subscriber base during the quarter. The analyst said that despite the cleaning of inactive subscribers, the average revenue per user (ARPU) growth for the telco was underwhelming. So one possible reason is Jio clearing out its inactive subs.
Even Nitin Soni, Senior Director, Fitch Ratings, told Economic Times that the “deactivation of low-paying users” has helped with the ARPU growth of the company. This was something that Jio would have badly wanted to do for long now.
This is good for the company in the long run. Even though the subscribers have declined during the quarter, the telco is earning more out of its active ones. Jio still has the worst active subscriber percentage as compared to Vodafone Idea and Bharti Airtel.
But one thing that works for Jio is that it is a 4G only company. Meaning, all of the customers who are active, even though they are less are consuming 4G services. With ARPU also increasing, it would result in better revenues for Jio.
This is what any company in Jio’s position would want to do. Reliance Jio must be confident about its plans of launching the JioPhone Next. If this affordable 4G smartphone from the company is a success, it will result in a much aggressive subscriber addition for the company. However, only time will tell whether the JioPhone Next is meant to change the 2G landscape in India or will it just be another smartphone in the market.
