Reliance Jio to Focus on Subscriber Numbers Not Tariffs

Its strategy is aimed at prolonging the pressure on rivals such as Bharti Airtel and Vodafone Idea.

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Reliance Jio to Focus on Subscriber Numbers Not Tariffs
Highlights
  • Jio's strategy is aimed at prolonging the pressure on rivals
  • We are not in the ARPU game: Jio's head of strategy
  • Airtel and Vodafone Idea's profits have plunged since the launch of Jio

India's Reliance Industries plans to remain focused on subscriber additions rather than chase higher tariffs for its Jio telecoms business, a top company executive said.

Its strategy is aimed at prolonging the pressure on rivals such as Bharti Airtel and Vodafone Idea, whose revenue and profits have plunged since the launch of Jio by Reliance boss Mukesh Ambani, India's richest man.

"We have been telling you from the beginning, the priority for us today is customers," Jio's head of strategy, Anshuman Thakur, said in a news briefing late on Friday after quarterly results.

Since its launch in September 2016 Jio has added 331.3 million subscribers by offering cut-price data plans and free voice calls, along with free music, movies and more. Its arrival has caused upheaval in India's mobile telephony market, forcing some small players out of business while bigger Vodafone and Idea have responded by merging in India.

Competition from Jio has sent the average revenue per user (ARPU) tumbling. Jio's results for the three months to June 30 showed its ARPU - a key metric for telecoms companies - was at Rs. 122, down 9.3 percent from a year ago.

"We are not in this ARPU game," Thakur said, adding that the management's priority is to ensure that more subscribers latch on to its network and use its services, thereby creating greater "long-term value."

Jio recently topped Bharti Airtel to become India's second-biggest telecoms operator behind Vodafone Idea.

Analysts had predicted that Jio would start raising its tariffs as soon as it reached a critical mass of subscribers.

Thakur, however, suggested that Jio is in no mood to relent, noting that it added 24.5 million subscribers in the quarter and that its subscribers consume an average of 11.4 gigabytes of data each month.

"We're quite happy with these key performance indicators," he said.

Reliance also announced on Friday that Jio has sold its tower assets via an investment trust to Canada's Brookfield Asset Management for Rs. 25,000 crores.

© Thomson Reuters 2019

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