RJio Can Retain Majority Of Customers In 2017: Study

by CXOtoday News Desk    Jan 06, 2017

mobile

A chunk of the Reliance Jio users will continue using its service even after the termination of free services, states a survey by Bank of America Merrill Lynch (BAML). This is in contract to the opinion of many that customers will discontinue as soon as they will be put on tariff usage.

“An overwhelming majority– over 85%—of Jio users will continue as paid consumers after the expiry of free offer. A further 8% could continue if voice issue is fixed–implying just over 6% exhibiting reluctance to continue with Jio,” BAML highlighted in its report dated 4 January.

The level of satisfaction for 4G service in India has risen to 97 percent in three months stated the study which was conducted back in September 2016 and was followed up by the end of the year.

The study found that 96 percent of the customers were satisfied with the voice quality and 66 percent with data speeds that they received. The survey found that over 75 per cent of respondents have directly or indirectly, through a friend, used Jio.

Currently, Reliance Jio’s Happy New Year offer is running on smartphones gives the users, free voice calling, video calling, data and messaging features. It has also incorporated two ‘Booster’ packs in the MyJio app. The two packs, which are paid features, will provide users additional 4G data on top of the free promotional offer.

“If our survey is indicative, Jio should be able to retain the majority of customers,” the report said.

While Reliance Jio is offering free 4G mobile broadband service till March 31, 2017 and unlimited voice calls and free roaming for lifetime. Rival company, Airtel just introduced a new offer that will offer customers free data for 12 months if they switch to Airtel’s 4G network. Vodafone and Idea too came up with a slew of initiatives to match up with the rival. 

 

Read more: Will RJio Put Telcos Under ‘Tariff’ Pressure In 2017?

 

In fact, major telcos are already bracing dip in margins and revenue amid increased expenditure on network infrastructure. Therefore, the year 2017, is going to be a tough year for telecom players. Consultancy firm Deloitte, expects pricing pressure to continue till a new paradigm on pricing is reached. “Profitability and cash flows will continue to be under pressure till profitable data play picks up in a significant way with linkages with Internet of Things and solutions for other business,” Deloitte said, as noted by a recent CXOtoday article. 

 

While it is clear that RJio has disrupted the equations in the telecom business in a big way, it can also be said that price will not be the only differentiating factor for telcos. Analysts believe that efficiency, effectiveness and cost control will be the focus areas for telcos in 2017.