You are here: Home » Technology » News
Business Standard

Jio's launch of low-cost smartphones may drive subscriber momentum: Report

Jio's aggressive strategy, new JioPhone offers and the impending launch of low-cost smartphones are likely to help

Reliance Jio | smartphone use | smartphone industry

Press Trust of India  |  New Delhi 

reliance jio, RIL

Jio's aggressive strategy, new JioPhone offers and the impending launch of low-cost smartphones are likely to help regain subscriber momentum, according to a report.

Near-term delay in tariff hike does not de-rail the long-term structural uptrend story in average revenue per user (ARPU), as any consolidation scenario could further boost Jio's subscriber addition, said a recent note by JM Financial.

Jio's subscriber momentum remained muted in the course of FY21, partly on account of spectrum constraints due to a surge in data usage post-COVID.

"...and better execution and positioning of the competition (Bharti) which has enabled it to gain a higher share of mobile broadband subscribers. However, we believe the subscriber momentum could be bottoming out, given the aggressive strategy of Jio to acquire significant quantities of spectrum in the higher frequency bands to improve capacity," it observed.

Additionally, new "aggressive" Jiophone offers, to be followed by the impending launch of the low-cost smartphones, are likely to help regain subscriber momentum, it pointed out.

It also observed that Jio's net subscriber addition had remained subdued, averaging 2.3 million addition per month against the net subscriber addition of 4.7 million in March 2020, and pointed out that with spectrum constraints now behind, traction in new Jiophone plans are key to revive subscriber addition momentum.

"A successful traction in both the new Jiophone offers and the impending smartphone launch enabling Jio to increase subscriber addition would be the key catalyst for an industry-wide tariff hike, which looks likely by the end FY22," the report said.

The digital building blocks are in place for Jio, although markets await more traction.

"We believe that Jio's significant focus on subscriber addition is due to the fact that it could enable it to cross-sell and up-sell digital opportunities to its subscriber base in the long term. Jio's B2C approach provides a wider moat in monetisation of digital opportunities given there is no exclusivity in partnership-based B2B2C (Business-to-business-to-consumer) business model followed by Bharti," the JM Financial report said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, April 02 2021. 15:46 IST