1. Reliance Jio free data extended to March 31; Mukesh Ambani announces Digital Money wallet push

Reliance Jio free data extended to March 31; Mukesh Ambani announces Digital Money wallet push

As expected, Reliance Jio Infocomm on Thursday extended its free offer beyond December 31, 2016, to March 31, 2017, calling it RJio’s Happy New Year offer.

By: | New Delhi | Updated: December 2, 2016 7:27 AM
mukesh ambani, reliance jio, jio 4g, jio 4g phone, mukesh ambani interview, jio news, reliance jio news, mukesh ambani news, reliance industries news, jio future, reliance jio future, future of jio, future of reliance jio RJio’s Digital Money app, which can be downloaded by subscribers of even other service providers, and is currently in use for only recharge of prepaid vouchers and utilities payment, will be expanded in a big way by signing up over 10 million retailers in the next few weeks across 17,000 towns and 400,000 villages, Ambani said. (Reuters)

As expected, Reliance Jio Infocomm on Thursday extended its free offer beyond December 31, 2016, to March 31, 2017, calling it RJio’s Happy New Year offer. Apart from the extension, Reliance Industries chairman and managing director Mukesh Ambani in a televised address praised the government’s demonetisation drive and push towards a digital economy, and announced a major thrust to its Digital Money wallet, which will not only challenge existing wallet players like Paytm but also incumbent operators who are still in the process of either building or scaling up their applications having similar features.

RJio’s Digital Money app, which can be downloaded by subscribers of even other service providers, and is currently in use for only recharge of prepaid vouchers and utilities payment, will be expanded in a big way by signing up over 10 million retailers in the next few weeks across 17,000 towns and 400,000 villages, Ambani said. Just for perspective, Paytm, the current market leader in wallet business, currently has only 1 million retailers on board.

Ambani said that the RJio Money Merchant app can be downloaded by retailers starting December 5.

Currently, the country’s largest mobile operator Bharti Airtel’s Airtel Money — a similar digital wallet — can be used for payment of utilities, recharges and for shopping and at eateries, but the scale isn’t very large in the latter segments.

Vodafone’s M-Pesa can only be used by Vodafone’s subscribers while Idea’s wallet is still under development. On the free data service, Ambani however introduced a daily cap of 1 GB after which the speed will be downgraded to 128 kbps. This, he said, is because around 80% used this much of data on a daily basis but since the balance 20% showed a higher consumption, the 80% had to face a poorer user experience. Still, Ambani said that the 1 GB daily usage will be 30 times the average usage on other networks.

Though on the intervention of the Telecom Regulatory Authority of India after a complaint by the incumbent operators RJio had limited its free offer till December 3 (only subscribers who had enrolled by this date were to get free services till December 31), it had given an indication of extending it beyond the date in its second quarter earnings release if it felt that consumers’ experience was not good due to interconnect hassles.

Ambani in fact also fired a broadside on the incumbents in his address on Thursday on the issue of interconnect where RJio has been locked in a bitter feud with the incumbents. He said, “While customers have shown unprecedented love for Jio services, we have not received the required support from existing operators. In the last three months nearly 900 crore voice calls from Jio customers to the network of our three largest competitors were blocked.”

According to him, the company has now started getting points of interconnect and in the past months the call block rate has come down from over 90% to nearly 20% as of Wednesday. “We are working with all our fellow operators to ensure that in the coming weeks, this will come below the specified grade of service, which is 0.2%,” he said.

In the first three months since launch, RJio has added 52 million customer, which according to Ambani has been faster than Facebook, WhatsApp or Skype. “On the whole, Jio is not only delivering four times more data than all other Indian telecom operators combined, but also much faster throughputs than any other mobile network in India,” he said. Ambani said that on average, an RJio customer is using 25 times more data than the average Indian broadband user.

The extension of the free offer beyond three months is sure to raise the hackles of incumbents but with no clear-cut regulatory guideline in this regard and any precedent, the chances of it coming under any regulatory scanner is remote. However, Trai chairman RS Sharma said that the regulator will look into RJio’s new offer and respond at an appropriate time.

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The extension of the free offer is sure to dent the growth of the mobile businesses of the incumbents, something that was witnessed during the July-September quarter and is expected to be much more significant during the current quarter. However, so far the net subscriber additions of the incumbents have not been adversely hit by RJio’s entry.

For instance, Airtel,Vodafone and Idea’s October subscriber adds have been higher than their last six-month average, cumulatively adding 4.9 million subscribers, which is higher than September when the cumulative net adds were at 4.8 million.

“Incumbents’ October subscriber adds don’t appear to have been impacted by Jio’s Welcome Offer. This is not surprising as Jio’s focus continues to be urban, where offtake is likely through dual SIMs given urban teledensity is 150%. Incumbents, on the other hand, are focusing more (for subscription adds) on rural areas. However, rising incidence of dual SIMs would start to hurt incumbents’ margins as it leads to higher churn. 3Q is likely to be weak for incumbents as it will not only include full-quarter impact of Jio’s Welcome Offer but some impact of demonetisation as well,” a recent Citi report noted.

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