No end to data wars: Reliance Jio free offers to continue for 12-18 months

The free schemes and recharge options that Reliance Jio is offering to its customers is likely to continue for the next 12-18 months, which means other telecom services providers like Airtel, Vodafone and BSNL will have to step up efforts to counter Jio's strategy.

Jio's tactic would lead to pressure on the average revenue per user (ARPU) of incumbent operators, US bank Morgan Stanley said in a report. It added that ARPU for Bharti Airtel, Idea Cellular and Vodafone India has been effectively capped at about Rs 300 due to Jio’s current offers, a report published in The Economic Times said.

Jio prepaid plans start from as low as Rs 19, and go up to Rs. 9,999, while postpaid plans are available at Rs. 309, Rs. 509, and Rs. 999 denomination. Jio launched its 4G service commercially on September 5, 2016 for free and crossed 50 million subscribers in just 83 days, and 100 million in 170 days, adding at an average rate of 6 lakh subscribers per day.

The company said that in terms of data usage it "has become the largest network globally" and plans to add one lakh mobile sites in coming months to double the network size.

The Morgan Stanley report mentioned that Jio, which started services on September 5, has netted 6 per cent of the country’s wireless subscribers and aims to get at least 15 per cent.

Reliance Jio extended the free usage period for Jio services to its existing and new customers till March 31, 2017. Jio reached the 100 million user mark in the first 170 days, adding consumers at an average of 600,000 a day.

Meanwhile, Reliance Jio Infocomm on Monday posted a net loss of Rs 22.50 crore for the six months ended March 31, 2017, as the company provided free voice and data services since its launch on September 5, 2016. The loss pertained to not just free voice and data services unleashed by its brand reliance Jio, but also on account of employee cost, finance cost, depreciation and other expenses.