Strategy is to extend the same pressure on Rivals
Reliance’s top company executive said that they plan to focus on increasing the subscribers rather than increasing tariffs for their Jio telecom business. Since the launch of Jio, the profits and revenue of the company are only on the higher side. Their strategy is to extend the same pressure on rivals such as Bharti Airtel and Vodafone Idea. Anshuman Thakur, Jio’s Head of Strategy said, “We have been telling you from the beginning, the priority for us today is customers.”
Jio aims to increase their subscriber base
Since the launch of Jio in September 2016, the company has added about 331.3 million subscribers to its base by offering them economic data plans and free voice calls. They also offered free movies, music and much more in the same plan. Since the arrival of the company in the Indian telecom market, they have caused good chaos for all the small and big players in the market. The result of this can be seen as all the small players are either running their companies at low profits. Whiles all the other big players such as Idea and Vodafone have joined their hands to stand strong in the market.
The average revenue per user (ARPU) is a key performance metric that is measured by consumer communications, networking companies, and digital media. Average revenue is calculated by dividing the number of the subscriber with total revenue. Since the launch of Jio, the ARPU of Jio is going below its competitor Bharti Airtel. The result of the last three months .i.e. from April-June showed its ARPU was at Rs. 122 which was down by 9.3 percent as compared to last year.
Jio is not so concern about ARPU as it wants to increase their subscribers’ base to its network and services which is one of the top priorities of the management. The company is looking for long term value which will make the company’s roots more strong in the telecom market as compared to its rivals.
On an average Jio’s subscribers consume 11.4 gigabytes of data each month
There are some predictions that the company will increase the tariff rates once they reach their targeted subscriber base. However, Thakur suggested, the company don’t want to back down as it has added over 24.5 million subscribers in the quarter and that their subscribers consume 11.4 gigabytes of data on an average every month. Further, he said, “we are quite happy with these key performance indicators.”
On 19 July 2019, Reliance also announced that Jio has sold its tower assets for Rs. 25,000 crores via an investment trust to Canada’s Brookfield Asset Management.
