Mukesh Ambani to Invest Rs 30,000 Cr in Reliance Jio to Further Improve Coverage; Expected to Hit 100M Users By March
Reliance Jio has been the boss of the telecom industry since its launch in September 2016, and pretty much no other network operator has been able to match it. Till December 2016, the company has gathered approximately 67 million customers and is expected to get bigger now.
However, most customers are facing some common problems with the service. Firstly, the network coverage is not good, and since Jio is only 4G LTE based, either you have network or you completely lose it. There is no 2G or 3G on it. Secondly, the call drops are quite high and have been a big issue since the launch.
To cover-up for the mishaps in the last couple of months, Mukesh Ambani, Chairman – Reliance Industries, has decided to invest a massive Rs. 30,000 crores in Reliance Jio. The main purpose of the investment will be to improve network coverage and set up improved infrastructure.
This brings the total investment to Rs. 2 lakh crore. A report by ET said, “The company will raise the funds through a rights issue of optionally convertible preference shares, it said in a notice sent to the National Stock Exchange.” The funds will be raised once in January and once in September.
The reason for such a high customer base has been the free 4G services and calling rates. However, most users keep it as a secondary sim and this is what worries the company. After the ‘Happy New Year’ offer, a lot of these people are expected to switch back to their primary mobile operator.
The speeds on Jio have been declining over the last couple of months, coupled with poor network coverage and call drops tend to frustrate the users. The company is also focusing on launching 4G LTE feature phones for people who don’t have to use a smartphone.
Jio expects 100 million subscribers by March 2017
The company is already close to 70 million subscribers and with only two and a half months left, the target doesn’t seem to be very ambitious. Feature phones, smartphones, Jio Fi device and now even the fiber network, all have contributed to this tremendous growth.
“However, given the way incumbents have cut tariff plans, it remains to be seen how Jio reacts from April, when commercial operations are launched and whether we see tweaks in the currently announced pricing plans or whether Jio sticks with the announced plan,” JP Morgan said in a report.
Airtel, Vodafone and Idea Cellular are trying quite hard to lure customers and not let Jio take any, but they cannot win unless they offer free services. Customers have realised that fast internet doesn’t need to be expensive and this is what has led to Jio’s success.