Ever since its launch Reliance Jio has been offering its services completely free as part of its Welcome Offer to test out the network before launching commercial operations. This offer was supposed to end on December 31, 2016, but recent reports suggest that Reliance Jio will extend the offer for even more time. Business paper Mint reported Jio’s head of Strategy and Planning as saying that it would be unfair to charge customers until Jio management is fully satisfied with the quality of service. Analysts are now suggesting that Jio will extend its Welcome Offer until March 2017; an additional three months
Jio has called out existing operators such as Airtel, Vodafone, and Idea, for not providing enough points of interconnect – which allow users from one network to speak to users on the other networks – and its Chairman, Mukesh Ambani described the situation as “the newbie being ragged by the big boys”. It just got a green signal from the Telecom Regulatory Authority of India (Trai) for it’s free-calls-for-life plans, but Trai also stated that Jio’s Welcome Offer had to end on December 3.
When contacted, a Jio spokesperson said the Jio Welcome Offer or JWO "benefits of free unlimited Voice and data will be available to all subscribers up to December 31, 2016." But, the "JWO will be available to new consumers for subscription till December 3, 2016," the spokesperson added.
As we noted during the launch of Jio, the fine print for the tariffs included the line: Reliance Jio reserves the right to amend/ extend the special benefits for the existing customers beyond 31st December 2016, in case they are not able to get adequate experience of seamless connectivity across network due to limited interconnects.
This lines up very clearly with what Thakur said at the press conference:
We have told Telecom Regulatory Authority of India 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.
Reliance Jio, 4G network which was launched by Reliance managed to win a lot of hearts thanks to their amazing schemes and offers. Right from the onset Mukesh Ambani, the whole and soul of Reliance Jio claimed that Reliance Jio would set new trends and would bring the cheapest 4G plans to the country. People awaited the launch of Jio with bated breath and even those who were not interested in 4G services were intrigued by it all. While Reliance Jio was to be the pioneer of 4G in the country, Airtel beat them to it and that seems to have established it even firmer in Reliance’s mind that they need to make up for the lost time. Reliance launches their Reliance Jio plans in 2 phases, of which the first one was for employees and the second one was for the masses. Although many had already decided to go with Airtel, there were quite a few who decided to wait and see how this brand 4G war would pan out and would they benefit from it?
But the wait proved to be worth it. Boy, were they rewarded! Before the launch of Reliance Jio, Reliance had made quite a few claims and on the day of the launch, it stood by all its claims. It became the first carrier to offer free calling over 4G in India. Reliance kept the budget conscious Indian in mind while designing plans and also ensured that there was something even for those who wished to experiment. They announced plans starting at just Rs 249, which was almost half the price Airtel 4G, their biggest competitor was offering plans for. Also, the plan did not include only 4G internet. It included everything from calling, messaging, 4G and other services. Though the actual 1GB plan (considered to be the average use per month) plan was still for Rs 499, it seemed like too sweet a deal and Indians went completely berserk. Whenever a company launches a new plan, they have some duration during which they offer freebies or run a promotion. In the case of Reliance, it was for a whopping 4 months! Reliance Jio launched sometime in September and Reliance announced that people would be able to use the free calling services till December 2016. For Indians, Diwali had truly come a month early!
However, while Reliance made these claims and also lived up to it, there was no information provided by them on what would happen once this offer ends. Will they hike up prices of the plan? Or would calling be charged additionally? And even if there were any changes, just how much would they affect the current pricing and how high would they be. There seemed to be no sort of clarity on the issue and Reliance did not venture to volunteer any details. However, soon after launch they ran into trouble with the authorities clamping down on them for their free calling offer which fell under the promotional scheme. According to rules by TRAI, no telecommunications provider is eligible to extend any promotional offer beyond a period of 90 days. And Reliance had already flouted the rule by extending the free calling offer to December end. In keeping with the dictate, Reliance decided to backtrack and a few days ago, once again Reliance began to trend as they announced their free calling offer would end on December 3rd in keeping with TRAI rules instead of ending on 31st December.
Though there wasn’t a huge outcry as Reliance was veering away from it’s promise, the company has once again managed to be in news with regards to their Jio plan as though they plan to end the first offer by December 3rd, it might actually not end. How? Reliance will seemingly continue to offer free calling even post December. And that too till March 2017! Reliance plans to give the same cheap Jio 4G services to users till the end of this financial year. it definitely came as a surprise once the rumours began to float. However, the news seems to be pretty valid though there has been no official confirmation regarding the same. But then, how does Reliance plan to flout the TRAI rules and continue with the offer? Well, it might not be the same Jio Welcome Offer as it is named presently and Reliance might package it differently. Also, there might be a slight revision in prices with certain rates being marginally increased. But overall, Reliance will maintain the terms and conditions of the plan and stick to its original offer. Though it is yet to be confirmed, if true, it will definitely make a whole lot of Reliance users jump with joy.
But then, why is Reliance being so benevolent? Definitely, for a carrier, the profit is the main aim. Well, according to sources, it is not benevolence on the part of Reliance to continue with free calling over Reliance Jio but rather trying to prove itself. Although there are never-ending queues outside Reliance Jio stores for the card, the employees are already overworked due to excess demand. This has led to issues for customers right from Day 1. While it is taking not hours but rather days for Reliance Jio SIM cards to get activated, even after activation, the woes continue. People are complaining of poor network connectivity and constant call drops. There are also many who have moved to other 4G providers. TRAI recently announced that Reliance 4G speeds in the country are among the slowest offered by any and it was indeed a shame for Reliance as it launched the Jio plan with much hype. And hence, in order to stand by what they say, Reliance has decided to extend their services for another 3 months, till March 2017. Also, Reliance is trying to attract more and more users and this new extension along with improved connectivity is expected to help improve their user base and give them positive feedback.
But what about Airtel and Vodafone, competitive carriers who had complained to TRAI about Reliance flouting the rules in the first place? Will they let Reliance go ahead with its plans or will they try and play smart? There has already been a constant war between the other 4G carriers and Reliance Jio with regards to the speeds, sharing of interconnections, and competitive rates. So then, will this new move by Reliance go smooth? But wait, since there’s no official news, does it even matter? Well, it does because according to a statement by Motilal Oswal 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 GB.” Well, we really do know about the carrier fights and TRAI rules but then free calls? We’re Indians and we are all ears! Hail, hail Reliance!
Reliance Jio customers may have some good news in store! While Reliance Jio has been asked by the TRAI to end its ‘Welcome Offer’ by December 3, analysts are of the view that the Mukesh Ambani-led telecom venture may find a way to extend the free service till March 2017! According to a latest Motilal Oswal report, Reliance Jio has indicated that it may extend the free offer, if the need arises. Motilal Oswal analysts have in a new note said, “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 Rs 130-140 per GB.”
Not only that, Citi Research analysts have also reportedly said that Reliance Jio may continue with its promotional offers. While a TRAI directive says that any free services plan cannot extend beyond 90 days, Citi Research analysts have reported Reliance Industries management as saying that there are no restrictions on the number of promotional offers. It appears that Reliance Jio feels that unless it is able to deliver quality service to customers, it is unfair to charge them.
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.
No comments:
Write comments