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. Communications Today brings newest JIO
News from all top sources.
"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.
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