Will Reliance Jio make it to 250 million subscribers?

It seems like the startling excitement created by the Reliance Jio's free internet and voice calling is slowly dying. We no longer see those long queue's outside shops for Jio Sim Card, do we? The matter of the fact is, though Jio was able to grab all the eyeballs, it failed to keep the buzz for longterm.

Though it looks like Reliance Jio is beating all its competitors in the market, the ground reality is much different. When Reliance Jio claimed to receive 16 million subscribers to its network in September, the incumbents were able to maintain their steady subscriber growth. According to data provided by the Cellular Operators Association of India (COAI), Bharti Airtel added 2.43 million users, Idea Cellular added 1.91 million users, and Vodafone India added ing 5,25,279 users, in September.

A research report published by Hong Kong-based brokerage firm CLSA said that during September, Reliance Jio’s 4G speed averaged at 7.2 Mbps, compared with Bharti Airtel’s 11.5 Mbps, Vodafone India’s 9.1 Mbps, and Idea Cellular’s 7.6 Mbps.

On the other hand, the analysts believe that even though Reliance Jio played smart by providing free services, not all customers are attracted by lower prices. Lack of clarity on the quality of its services could have prevented customers from trying out the new entrant.

“In the telecom business, incumbency is a major advantage. It’s very difficult to dislodge the incumbents. Also, consumers have a degree of inertia when it comes to changing operators. In the absence of unambiguous market data, people seem to be reluctant to abandon incumbents,” said Mahesh Uppal, director of a consultancy firm ComFirst told The Indian Express.

Within the first two weeks of the company’s commercial launch, only 201 mobile number portability (MNP) requests were made to other operators. Out of which, 83 were made to Bharti Airtel, 56 to Vodafone India, and 62 to Idea Cellular. Considering the less number of requests, it is evident that the lucrative offer didn't prove to be enticing enough.

To fight the expected connotation, the incumbents also launched a slew of benefits on voice, data and content services. However, it didn't prove to be effective in saving their market share. Bharti Airtel’s consolidated net profit for the three-month period ended September declined marginally to Rs 1,460.70 crore, compared with Rs 1,462 crore in the previous quarter, on the other hand, Idea Cellular’s second quarter net profit was down 58.5 percent sequentially to Rs 91.4 crore.

Analysts are expecting the tariff war to get further aggressive, once the Reliance' free services end.

Reliance Jio is aiming to reach 250 million subscriber base. Considering the ongoing lackluster moments of the company, reaching the target looks highly doubtful.