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Revealed: How Mukesh Ambani catches and retains Jio customers

Friday, June 22, 2018, 10:35
This news item was posted in Business category and has 0 Comments so far.

Just 19 months after starting its services, Mukesh Ambani-controlled Reliance Jio’s revenue market share widened to almost 20 per cent as of March end and its subscriber share to 15.8 per cent . Customers are flocking to Jio. It has become India’s third-largest telecom operator by revenue market share, dislodging Kumar Birla-led Idea Cellular and closing in on Vodafone India as its aggressive pricing strategy left rivals struggling.By providing dirt-cheap data, Jio has not only disrupted the market but also changed the rules of the game. It has virtually reinvented the mobile phone as a mass entertainment device. Nearly half of the Jio customers use their mobile internet connection “primarily” to watch live television, according to a Bank of America Merrill Lynch survey cited in a Bloomberg report. “The telecom aggregation apps like JioTV and JioCinema are turning into one-stop places for consumers to view all content as they do not have to download the individual over-the-top streaming apps,” the report said. Data usage in India has rocketed since Jio started its operations in September 2016. An average Indian telecom user now consumes 2GB of data every month compared to 0.23GB before Jio’s launch, according to quarterly data from the Telecom Regulatory Authority of India. That number is expected to go up to 18GB a month in the next five years, according to consultancy firm EY.This surge is fuelled by Jio’s free services for the first six months followed by cheaper data tariffs, and now its 4G-supporting smartphones. Customers who were used to shelling out roughly Rs 300 for 1GB of data, now get it for about Rs 15. Two-thirds of the 1,000 Jio users surveyed by BofAML said that they use data to stream videos online. About 68 per cent of them download videos on their mobile handsets. Only 23 per cent said that their data usage habits have not changed because of Jio’s entry. So Jio has turned mobile phone from a communication device to an entertainment one. However, analysts have doubted if Reliance Jio can grow on the power of content. Global financial major Goldman Sachs had said in a report in March that it did not buy into the theory that Jio’s bundled video-to-music streaming services would give it an edge in the world’s second-largest telecom market. “We do not believe content will lead to a competitive advantage in India for one telecom operator versus the other,” Goldman said.

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