Jio Dhamaka!! | Wecome Offer Extended Till March 2017 (Digital India)

 

Reliance
Jio Infocomm Ltd may extend its offer of free phone services to
customers till March, about three months later than its earlier plan of
ending free services on 31 December, parent Reliance Industries Ltd told
analysts. 

“Mass scale free welcome offer could continue until March 2017 to
attract subscriber growth towards the celebrated 100 million mark with
RJio’s indicative data pricing at Rs130-140 per giga byte,” Motilal
Oswal analysts wrote in a 21 October note.

Reliance Industries’
management said that there were no restrictions on the number of
promotional offers a company can launch, analysts at Citi Research said.


“If the situation with the points of interconnect pertaining to
voice calls persists with the incumbents, then they will look at
innovative solutions to ensure that users do not pay unless the quality
of service improves,” Citi Research analysts wrote in a note.

 At
a press conference after Reliance Industries reported its
second-quarter earnings on Thursday, Anshuman Thakur, head of strategy
and planning at Reliance Jio, said: “We have told Telecom Regulatory
Authority of India (Trai) and government that customers have faced
issues with regard to the quality of service due to the interconnection
congestion and they have not been able to enjoy the services that they
deserve and what we want to deliver to them. And till we are in a
position where we can deliver the quality of service as desired by the
Jio management, it will be unfair to charge the customer.”

Thakur added that Jio does not need permission from the telecom regulator to extend free services beyond December.

“Trai
tariff is under forbearance. What Trai requires operators to do is file
the tariff plans with Trai so that if they have any comments they can
come back. This is post seven days of implementing the tariff. So Trai
does not need to approve but if it has any comment or observations to
make, or wants the operator to modify the plan in anyway, the operator
has to do that,” added Thakur.

Morgan Stanley Research in its 20
October research said, “Assuming Jio delays the commercial launch, there
could be 10% upside to its FY2017 consolidated numbers, as currently we
assume launch to be in January 2017 leading to quarterly losses of $824
million in fourth quarter of 2017; in case of delay the losses are
likely to be capitalised.”

RIL said on 20 October that the
welcome offer on Jio that the company had launched on 5 September will
get over on 3 December but the benefits of free data and calls will
continue till 31 December. According to Trai guidelines, a telecom
operator cannot offer a promotional offer for more than 90 days and
hence Jio will have to stop the same by 3 December.

According to
Edelweiss Securities, call failures on Jio’s network continues to be
severe (75 failures in 100 call attempts) given inadequate release of
points of interconnection by incumbent operators. Edelweiss Securities
added that Jio is targeting an average revenue per user of Rs300-500
with a larger focus on middle class customers.

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