Providing first of its kind “cheap data offers”, Jio has not only disrupted the market but has also changed the rules of the game. What is the reason that customers are still flocking to Jio?
Broadly speaking, Jio has reinvented mobile phones as a source of mass entertainment. Nearly half of the Jio customers today, use mobile phones primarily to watch television.
As per a recent report from Bank of America Merrill Lynch survey cited in Bloomberg, The telecom aggregation apps like JioTV and JioCinema are turning into one-stop places for consumers to view all content as they do not have to download the individual over-the-top streaming apps.
Meanwhile, data usage in India has skyrocketed since Jio started operations in September 2016. Telecom Regulatory Authority of India published a report revealing, “An average Indian telecom user now consumes 2GB of data every month compared to 0.23GB before Jio’s launch.”
While the initial surge in Jio customers was due to free data offers and services, today its 4G supporting smartphones have also garnered a lot of customer base. Earlier customers who would pay Rs. 300 for 1 GB a month today get 1.5 GB a day at the same price valid for the month.
Though Jio has done remarkably well in telecom, analysts are doubtful of the fact if it can grow at the same pace in the field of content. Global financial giant Goldman Sachs has said, “We do not believe content will lead to a competitive advantage in India for one telecom operator versus the other.”
Notably, the company has saw a net profit of Rs 510 crore in the quarter ended March compared with Rs 504 crore in the previous three months. Jio’s operating revenue increased 3.6 percent reaching to Rs 7,128 crore. With user additions from existing companies coming to an end, old telecom companies may find it difficult to cope up with the growing success and revenue of Reliance Jio. The battle is tough and it is expected to get tougher in the near future.