In what could be seen as a breather for the industry, the new tariff plan launched by Reliance Jio on Tuesday has become costlier by around 33% for consumers. Jio’s new offer — the earlier one launched on April 11 called Dhan Dhana Dhan has run its cycle of 90 days — has reduced the validity to 56 days from the earlier 84 days. The new rates offer 1 GB of data per day for a period of 56 days for a recharge of Rs 309 against the earlier 1 GB data for 84 days for a similar amount. Thus, the per-GB data rate goes up to Rs 5.51 from the earlier Rs 3.67, up 33%. For consumers interested in availing the 84-day offer, Jio has introduced a Rs 399 pack.
Still, Jio’s rates are lower than what the incumbents charge, where the lowest offer is for Rs 10 per GB. Further, all voice calls on Jio continue to be free, which is not the case with other operators.
In the new scheme, Jio has launched a new slab of Rs 349 with a validity of 56 days with 20 GB data. The difference here is that there’s no fair usage policy for data usage that is applicable to other packs, which means that there is no daily cap of 1 GB on data usage. If a consumer consumes 20 GB before expiry of validity the speed will be reset at a lower speed of 128 kbps.
Though the charges have been hiked, Jio officials are confident that their average revenue per user (Arpu) would increase as most consumers who had opted for Rs 309 plan in April would now recharge for Rs 399 to maintain the data pack’s 84-day validity.
According to Kotak Securities, Arpu range of Jio’s plans now stands at Rs 122-661 versus Rs 97-630 earlier. “The move is largely on expected lines. While Jio has not raised pricing to the base plan levels and continues to run an extra validity and/or extra data allowance promotional across most of its plans, we believe this is a positive move directionally. It provides some breather (not relief) to the industry that has been reeling under the Jio promotion onslaught; industry’s quarterly net revenues have come down 25% plus in the past three quarters. This move should provide the industry an opportunity to stem the free fall in Arpu levels seen in the past three quarters,” the Kotak report noted.
However, the industry still faces the threat of a major disruption from Jio as it is expected to launch within a month a low-cost, feature 4G VOLTE phone that would be targeted at the mass market, which today does not use data.