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Can Jio hurt other telecom players with more offers?

Reliance Jio may not be in a position to offer complementary benefits for another three months, the Telecom Regulatory Authority…

Can Jio hurt other telecom players with more offers?

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Reliance Jio may not be in a position to offer complementary benefits for another three months, the Telecom Regulatory Authority of India (Trai) said.

“Reliance Jio cannot offer complementary benefits for another three months as the latest offer violates regulations,” the Trai stated recently.

Mukesh Ambani-backed Jio has jolted the telecom sector completely since its launch in September 2016. In only 170 days, Jio’s subscriber base crossed 100-million mark.

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"Jio was launched on 5 September 2016. In only 170 days we have crossed the 100 million customer mark. This achievement is of India and Indians," Ambani said in February.

Meanwhile, in a latest statement, Jio said that nearly 72 million subscribers have converted themselves to paid users by March 31.

Although Trai has forced Jio to end ‘Summer Surprise’ offer after Vodafone’s complaint but now the company has come up with new price-war offer of Rs.309 which will give Jio Prime subscribers 84 GB data for nearly three months (84 days).

Jio Prime subscribers will get 84GB for 84 days on the first recharge of Rs.309, while those who recharge of Rs.509 will get 168GB for 84 days, according to Jio’s website.

Other major telecom players, such as Airtel and Vodafone, have also slumped data and call charges to retain their customers.

Airtel’s Rs.345 plan offers 28GB 3G/4G data with a validity of 28 days. In addition to data, customers will get unlimited local and STD calls also in this offer.

Besides, Vodafone has announced unlimited calls across all networks in the country at Rs.344-349 plans. The plans come with a weekly limit of 300 minutes and 1,200 minutes.

Jio has launched a price war in the telecom industry which is good for the customers but may leave few players alive. British telecom major Vodafone’s plan to merge with India’s Idea Cellular and create a new telecom giant to counter Jio is a latest example of telecom companies’ ongoing tough time.

According to Ambani, “Ninety nine per cent of the country's population will be covered by the Jio network by the end of 2017”.

The statement is a threat for other players who were minting money in the fast-growing Indian market. In Q3FY17, Airtel reported a massive 65.5 per cent dip in third quarter profit, which was far lower than analysts' estimates. Other companies have also seen a decline in their profits after Jio’s launch.

The 72 million subscribers, who have been stolen by Jio from other players, will now contribute to Jio’s earnings. Jio’s latest offers are still below the market price which has been set by other telecom players.

Meanwhile, the latest Jio offers indicate that the company will continue to hurt other players to achieve Ambani’s dream of covering 99 per cent population with Jio network.

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