Has Jio learnt the hard way that freeloaders aren't faithful?
The might may not have fallen yet, but this is definitely a critical hit. Mukesh Ambani’s Reliance Jio - an ambitious project that revolutionised the telecom industry in India - seems to be learning a hard lesson right now. You can’t win loyalty with freebies.
Barely a month ago had the company managed to boast a 100 million subscribers across India (according to reports, the telecom giant has added more than 20 million new customers in the past four weeks) - a feat that is both commendable and awe-inspiring considering that Jio had entered the market in September 2016 - but recent reports suggest the figure is probably not a sustainable one.
Jio began with a free offer. Free calls and 4G for all meant a rapid expansion in the Jio subscriber base; after all, who doesn’t like free stuff? But the beginning of March marked the end of the free Jio era (well, it wasn’t really an era). In a bid to retain its wide, though freebie-induced subscriber base, Jio introduced a scheme called Prime. For Rs 99 a year (offer valid only till March 31), subscribers would be entitled to extremely cheap 4G data (for not more than Rs 10 a day).
Once that offer was nearing an end, Jio introduced cashbacks from Jio money so that customers could avoid paying the monthly Prime fee, to avail the offer. But it would seem that cheap offers don’t trump free stuff at all. According to a news report on ET Now, Jio has managed to lure in only 16 million customers for the Jio Prime membership offer.
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| Photo: Indiatoday.in |
Reliance Jio’s losing popularity in the market can be attributed to several factors. Jio, with its free schemes and (later on) highly predatory prices, managed to trigger a price-war in the telecom industry in India. Everyone from Vodafone to Idea to Airtel slashed their prices like there is no tomorrow. In fact, Vodafone and Idea went into a merger, something that does not bode well for the Mukesh Ambani-led telecom company.
The Vodafone-Idea merger will also lead to pooling of infrastructure, which will inevitably lead to better service quality and customer experience. The pooling of resources will also result in a decrease in costs, which would surely lead to better, more competitive offers from the company's end.
And while 4G coverage all over India – still being in a nascent stage – is patch at best, Jio being a new player has not yet managed to win the trust of its fickle customer base, something both Airtel and Vodafone enjoy, thanks to years of building a brand. Jio’s blitzkrieg into the telecom industry may have been a game-changer, but it is becoming more and more evident every passing day that Jio itself isn’t.
While 16 million Prime subscribers (13 per cent of the original 120 million) are in no way an indication of the fact that the other 87 per cent have discarded Jio, it’s not an encouraging number either.
Perhaps it is time that Mukesh Ambani stopped concentrating on getting more customers through free offers, and started retaining the existing ones through quality service.