Will Reliance Jio capture market after Free Offers

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Reliance jio entered the telecommunication market with a blast. It's disruptive plans made all other Telecom operators reconsider their plans and packages and compelled them to reduce their cost to a large extent.

On September 5th 2016 Mukesh Ambani LED jio info comm announced public launch of jio 4G network with Welcome Offer for ~3 months (till 31st Dec 2016), during welcome offer the users were given unlimited data (4gb per day cap), unlimited voice calls and unlimited sms. This unbelievable offer attracted around 50 million uses on its network within the span of just 3 months. which Jio claims to be the fastest growing tech company even faster than Facebook and Google. Initially the condition was such that people were standing in queues outside Reliance Digital stores to get hold of free jio SIM with welcome offer. In first week of December Mukesh Ambani announced a 3 month extension of free Reliance offer with the name of Happy New Year offer till 31st of March which includes free unlimited calls and SMS and 1 GB of data per day at high speed, to increase the user base to 100 million. 

The main question now is after the Happy new year offer, how many users will Jio be continuing with the service. It is human nature (and specially Indians) to try out anything if its free. The same is the case with Jio. Jio launched to public with everything free for more than 3 months, which attracted many customers to try it out. There were a lot of issues related to jio network in the beginning, but lets not forget, Jio services were new and some issues were expected to occur. 
But with all that, most customers of jio were not organic, and were there only there due to free offer. Even though many people, as many as 50 million started using Jio, but very few discarded their older connection and kept Jio as the secondary sim. This was mainly due to issues with the connectivity with other networks in the beginning. 

Now when Jio services will go paid after the completion of Happy New Year Offer, it will be the question that how many complementary customers will convert into paid customers. There will be many challenges in the way of this conversion from free to paid customers.

  1. Network Coverage This would be the most important and significant factor for people to adopt Jio as their primary number. Jio's 4G network is still available only in city areas. The coverage is not yet available in small towns and villages. A considerable share of Indian population lives in towns and villages or visit frequently to villages for business or other reasons. Due to non availability of network in these areas, many will not be able to adopt Jio as primary connection.

  1. True colors of 4G: Since the launch of Jio, all the users are waiting to experience true power of 4G. Jio has not yet shown its full potential. There has been regular glitches since the public announcement, whether its slow internet speed or call connection problem. The speed enthusiast might not be very happy with this, as high speed and cheap data is what attracted them towards Jio. This is the second important factor, which may prevent users to adopt Jio as primary number. If the speed is not better than 3G of old established players and once the Jio start charging for it's services, only those users will switch who see some advantage of 4G over 3G.

  1. Competitive Plans from other telcos: To counter the effect of Jio promotional offer and to retain the customer other major telecoms operators have started special offers on data and calls. Due to the telecoms war, the data and call prices have come down by 150%. Now with major telcos like Airtel, Vodafone, there is a plan available for cheap data and calls. For example Rs 345 airtel offer with free calls and 3 GB of data for 28 days. Similar plans are available with Vodafone and Idea. With similar plans comparable to Jio and better coverage and connectivity, Jio will face a challenge to retain the customers after the service goes paid.

  1. VoLTE only network: Jio is the first all VoLTE network of India. VoLTE means Voice over Long-Term Evolution, which means the voice calls also use LTE network. This is different from other 4G network in a way that other networks like Airtel 4G etc. use 2G/3G for voice and 4G for data in their 4G circles. Being all LTE is not a bag thing in itself, it give better quality voice and video calls but this means that any user with a non VoLTE mobile cannot use any service of Jio.  Majority of Indian mobile users still do not have a VoLTE enabled handsets, so to use Jio that will mean buying a new phone, this may be one of the factor many people will be hesitant to switch to Jio.

  1. Cost of VoLTE handsets: VoLTE is a entrant technology in India, and still most VoLTE handsets are above average cost. This may also play a factor, some people may not switch to Jio. 

So in summary, SIMILAR COST - BETTER COVERAGE - NO ADDED ADVANTAGE OF SPEED - TOTAL COST OF SWITCHING TO JIO will become real challenges in the way of Jio for retaining users after free offers finishes.


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