Reliance Jio is proudly advertising the millions of users that have joined the relatively-new network in the shortest span of time. The company is aiming at 100 million users by March 2017, which no longer seems like an impossible task after RIL's chairman and managing director announced that the 4G data and other services will remain free till the first quarter of next year.
In agreement with Jio, Fitch Ratings director Nitin Soni said that Reliance Jio is on track to achieve the said target by March 2017. So, there may be 100 million users on Jio's network by the end of March 2017. But the concern is what happens after that.
"They [Reliance Jio] currently have 52-55 million subscribers and it could well increase to 100 million by end of March, but we will need to remember that these are free services," Soni told BTVi in an interview. "So, as long as it is free, even a customer who is a customer of Airtel or Idea will still take a free Jio SIM to enjoy free services for the next three months. But I think there will be some churn when Jio will start charging from April 1 and that churn may well reduce the subscriber base by 5-10 percent," he added.
It will be the moment of truth for a Jio user, who might be using the network as a secondary SIM. Will users actually pay for the services after using for almost 6 months for free? It remains a mystery.
However, if Jio can manage to deliver the optimum user experience, no call failures and faster data speeds, as promised, there is still hope. As Soni points out, there may be other offers once the free period ends from Jio and incumbent telecom operators in a bid to retain existing subscribers.
Soni also anticipates consolidation of the telecom industry as Jio takes charge with its nationwide 4G coverage and competitive tariffs. Idea, for instance, lacks a strong 4G spectrum, which could lead to some merger or acquisition to strengthen its position in the market.
"And whenever a new entrant comes into this industry, it negatively impacts the weaker telecom company first. We believe that Idea could be well affected in the next 12-24 months and which is the reason we think that they could do some M&A activity to consolidate their position," he added.
As for the end users, Soni says the data tariffs will drop by 15-20 percent. The year 2017 is going to be an important year for the telecom industry and a lot of eyes are set on the next level of transformation.