Sunday, 25 October 2020

Reliance Jio boasts huge subscriber base – but just how many are active users?

by Harry Baldock, Total Telecom
Friday 09 October 20

Details released from the Telecom Regulatory Authority of India (TRAI) suggest that Jio’s active users have fallen to a three-year low of 78%

Reliance Jio has become a behemoth in the Indian telecoms market. Since it burst onto the scene in 2016, the disruptive operator has managed to snap up 397 million customers, leveraging attractive low prices that its competitors simply could not match.    Jio’s lead in subscribers has been compounded by the adjusted gross revenue (AGR) crisis that hit the Indian telecoms sector this year…

Reliance Jio has become a behemoth in the Indian telecoms market. Since it burst onto the scene in 2016, the disruptive operator has managed to snap up 397 million customers, leveraging attractive low prices that its competitors simply could not match. 
 
Jio’s lead in subscribers has been compounded by the adjusted gross revenue (AGR) crisis that hit the Indian telecoms sector this year, which saw operators slammed with government payments amounting to billions of dollars. Jio, however, quickly paid off its relatively small AGR dues, while its rivals, Bharti Airtel and especially Vodafone Idea (now Vi), continue to struggle. The Supreme Court recently agreed to allow the telcos to repay these huge debts in yearly instalments for the next decade. 
 
This volatile environment has seen Jio go from strength to strength, attracting enormous investment from around the world. In recent months Jio has sold stakes in the billion for a cumulative $20 billion, with major investors including Facebook and Google.
 
However, there appears to be one metric where Jio is not performing quite so well as its rivals: active subscribers. While Jio’s subscriber base is undeniably the largest in the country, stats from TRAI show that its active subscriber number has fallen to just 78%, 6% lower than the previous year. This equates to around 87 million inactive users. 
 
When it comes to Jio’s rivals, Vodafone Idea and Bharti Airtel’s active users were 90% and 98%, respectively; in total, this would mean that Bharti Airtel’s active users actually match that of Jio at around 310 million.
 
Reasons for this discrepancy are up for debate, with Jio telling the Financial Times that “there are various reasons that a customer, especially data customers, may not be active on the network at a given point of time.” 
 
Economic pressures of the coronavirus have surely played a role here, with customers less likely to top up their plans during the crisis. Indeed, Jio’s super-cheap plans may themselves be a factor, with some customers likely to have purchased their plans due to their affordability, with little intention of frequent use.
 
Regardless of why their active user numbers are dipping, this is a troubling trend for the Indian giant, which currently aspires to increase its customer base to 500 million within three years. If the company is to continue to attract investment and succeed in its diverse strategy of providing everything from e-commerce to fintech, user activity will only increase in importance.
 
 
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