1 Crore Users Left Jio In 90 Days; But Active Users & Profits Increase (How?)

1 Crore Users Left Jio In 90 Days; But Active Users & Profits Increase (How?)
1 Crore Users Left Jio In 90 Days; But Active Users & Profits Increase (How?)

September seems to be the subdued quarter for Reliance Jio as the company is first time facing its subscriber base erode in 10 quarters, applying a brake on the Mukesh Ambani-led telco’s juggernaut. 

Higher Number Of Subscribers 

But that’s not it, still there could be a silver lining for Mukesh Ambani’s company.

According to Senior Director, Fitch Ratings,  Nitin Soni “A combination of strong data consumption along with the deactivation of low-paying users contributed to Jio’s decent sequential ARPU growth,”.

It seems that the subscribers who use Jio as a second SIM either to retain their number or to continue receiving calls, have likely left the company. 

This subscriber switch leaves Jio with a higher number of subscribers who pay money to use the telco’s services, translating to better revenue collection.

How Did This Happen?

In reality, Reliance Jio has suffered a much inferior rate of active subscribers when compared to its rivals Airtel and Vodafone Idea.

Basically, Reliance Jio’s active subscriber rate is a shade under 80%, according to the latest data published by the Telecom Regulatory Authority of India (TRAI).  

In comparison, Airtel’s rate is nearly 98%, while Vodafone Idea is a little over 87%.

Active subscribers are those which pay for an active plan to their telecom provider, hence they are important.

The higher the rate of active subscribers, the higher the amount of money the telecom company earns from them.

In the case of Jio, it has been saddled with a sub-80% active subscriber rate for a long time now. 

This could be caused by the simple reason where the company does not terminate or suspend services after the expiry of its users’ plans.

So, Jio subscribers can continue to enjoy incoming services even after their plans expire.

While the peers like Airtel and Vodafone Idea, only offer a seven-day grace period for their subscribers post expiry of their plans. 

So practically, their users will have to pay at least Rs79 per month, depending on their respective circles.

Jio Avoids Tariff Rise And Forcing Subscribers

So far, Jio has refrained from forcing its subscribers to have an active plan for basic services like incoming calls and messages.

 The service provider has also avoided raising tariffs.

 This way, the telco has only one option left – a higher active subscriber rate, resulting in improved realisations from its customer base.

Apart from this, Reliance Jio has a huge lead over Airtel when it comes to the number of total subscribers – 429.5 million versus Airtel’s 354 million.

it was in a neck-to-neck fight with Airtel in terms of active subscribers until June 2021. 

At last, Jio overtook Airtel in July this year, and currently has a lead of 4 million over Airtel.

Tariff Hike In Horizon

The US brokerage Jefferies called Jio’s performance “operationally weak”, and added “a repeat of its 2Q [second quarter] subscriber performance in 3Q [third quarter] might dash hopes of a tariff hike in the near/medium term,”.

It is expected that the diwali launch of JioPhone Next could bring back some of the lost sheen to the Mukesh Ambani-led telco and re-engage some of Jio’s subscribers in the lower pyramid. 

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