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Business
05 Apr 2017

Jio's free services may not end anytime soon

Jio may give more discounts and services eventually

It is evident that Reliance Jio is bearing a loss in revenue to give free service to its users.

Reportedly Jio had the opportunity to garner a revenue of over Rs. 4000 crore in the April-June period this year but it declared a summer surprise with extended service period.

Now chances are Jio may bring more surprises to solidify its position in the market.

In context

Jio may give more discounts and services eventually

Possible reasons

Why did Jio extend its free offers?

Reliance Jio aims at easing customers in the paid subscription, a sudden jump to high charges from free services may lead to a loss in users.

Jio needs to sort hiccups in connecting calls before entering into paid services.

Many still use Jio as a secondary network to avail free Internet, the firm needs to make sure they convert it to the primary one.

Tough spot

Competitors are really in trouble thanks to Jio

As a result of this summer surprise by Jio, Bharti Airtel's market shares fell by around $500 million on Monday.

Idea Cellular Ltd's shares are now Rs. 85 apiece, 23% lower than the price Aditya Birla Group aims to buy shares from Vodafone.

Telecom majors will have to slash their prices again if they want to stay ahead of Jio's extended summer service.

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What may be in the offing?

More for customers

What may be in the offing?

Jio may come up with a 'Monsoon surprise" and extend its services further with minor charges.

Jio has already said there will be "many 'surprises to be rolled out for Prime customers."

The general consensus is that the road to fully payable services is going to be more of a subtle one rather than a steep hike.

Overview

Reliance Jio June 2017 extended offer details

First and foremost, users can now enjoy Jio free data and call services till June 30, 2017.

Users need to get a recharge of Rs. 99 to enter the Prime membership. A prime member needs to do another recharge of Rs. 303 before April 15 to get the free services for the next three months.

This paid tariff rates will be applicable from July.

By 2022, Jio will be able to break even

Prediction

By 2022, Jio will be able to break even

Financial service firm IIFL believes Jio is going to scale up its market to 22% and revenue to Rs. 60,000 crore and will break-even by 2021-22.

It also, however, predicted that Jio will have to bear a loss of Rs. 19,600 crore in 2017-18 and Rs. 11,500 crore in 2018-19 before it gets to see a profit.

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