Financial Insights

MASSIVE FALL IN 4G USERS- IS THIS AN EYE OPENER FOR RELIANCE JIO?

Telecom giant Reliance suffered a massive blow in December. As Data released by TRAI reveal that there is loss of 12.9 million 4G subscribers by Reliance Jio in December quarter.Its gross user base now down to 415.71 million.

There are famous quotes that “ONE MAN’S LOSS IS ANOTHER MAN’S GAIN”. Same happened with JIO. Loss in Jio subscribers has benefitted AIRTEL. Airtel has added 0.47 million wireless customers and now its gross user base increased to 355.76 million. BUT VI(Vodafone-IDEA) continues to  lose  1.61 million users bringing their user base to 265.51 million.

Sharp fall in Jio users also suggest that JIO 4g smartphones which are developed with google haven’t brought more customers to it.

The increase in tariff rate by all the telecom companies has affected the customer. It has been expected that after an increase in tariff there is a draw-down in the user base. But losing the user beyond expectation is really an eye opener for JIO.

On the other hand, the smart management by airtel has increased their users despite the increase in tariff rate.Trai data showed that there is slight increase in Customer Market share of Airtel (30.81% from 30.43%)and VI (23% from 22.88%) but decrease in Jio(36% from 36.71%).

The biggest setback for jio came from rural areas where till now jio is considered to be Masiha of poor people.But in december  JIO lost nearly 6 million users in rural India compared to Airtel and VI who has also lost their user  by 1.18 million and 0.97 million respectively.

A Key metric VLR reflects that 98.01% of the users were active for Airtel,86.42% for VI but only 87.64% for JIO.Now It is interesting to see what strategy JIO brings to bring their user back and to add more and more users.

ABHISHEK KUMAR(Research Analyst at Jobaaj.com)

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