Jio Can Drive Momentum by Aggressive Prices, Cheap Smartphones: Report

As per a report by JM Financial, Reliance Jio's poor form can soon be over. The report noted that aggressive strategy, new JioPhone offers and, most importantly, impending launch of low-cost smartphones can help regain subscriber momentum.

Positive Signs for Reliance Jio?

The report noted a variety of points for the same retention and eventual growth. Firstly, short-term delay in tariff hike does not derail the long-term structural uptrend in average revenue per user (ARPU). Further, any consolidation could further boost Jio's subscriber addition.

Incidentally, the telco is being outdone by Airtel in terms of subscribers, gaining the most subscribers for 6 months in a row. However, the Mukesh Ambani-led telco finished second in each of those 6 months, as Vodafone Idea is still in freefall.

The report noted that this downturn is because of the lack of spectrum the telecom operator has. Notably, post-COVID, a huge upturn in data usage caused customers bandwidth, speed and call drop issues. This drop in quality is in part the cause of Reliance Jio's slow 2020-21.

However, it still remains the largest telco, with a market share of more than 35%, which translates to 410 million users. Of course, it has more than made up for the same in the latest spectrum auction.

Jio Devices

Reliance is going to come out with a few devices to set India's population up for 4G and beyond. The list of devices is as follows:

• JioPhone 1 (4G feature phone)
• JioPhone 2 (4G feature phone)
• JioBook (4G-enabled laptop)

In February, the telco announced two mega plans for the JioPhone. Stating that the plans are for a 2G-Mukt Bharat, these plan included unlimited voice, SMS and 4G data for as low as Rs. 1,499.

The report noted that a "successful traction" in both the new JioPhone offers and the smartphone launch should enable the telco to gain subscribers faster. The report also noted this will also catalyze industry-wide tariff hike by the end of FY22".

Along with JioBook, which is rumored to be priced as low as Rs. 9,999 and with a lucrative B2B offering in JioBusiness, the digital building blocks are in place for Jio.

The report by JM Financial noted that the telco's "significant focus" on growing subscribers is because it could present long term cross-selling and upselling digital opportunities to them.

The report also noted that the telco's B2C approach can present a wider opportunity to monetize a variety of said digital opportunities.