HOME > BUSINESS > Reliance Jio to lose over half of its subscribers by the month-end – CyberMedia Research

Reliance Jio to lose over half of its subscribers by the month-end – CyberMedia Research

LAVA M1 Connect

Even as some brokerages are predicting that Reliance Jio will manage to carry over 80% or more of its subscribers when it starts charging for its services at the end of this month, CyberMedia Research said it sees 55-60% of existing connections getting abandoned.

Jio is estimated to have 105-110 mln connections at present, though the exact number of subscribers that represents is harder to tell due to the use of multiple connections by the same individual. The company has been providing free services for the last six months.

Two brokerages — Bernstein and Bank of America-Merrill Lynch — have projected bullish estimates for the number of subscribers who are likely to convert from free to paid usage at the end of the month.

While a survey byBernstein found that only 2% of Jio’s existing users were planning to give up their connections at the end of the month, BoFA-ML found 82% willing to continue with the operator even after the free-to-paid transition.

Adding it voice to the mix, CyberMedia Research (CMR) said India has “a little over 160 million” 4G users as of mid March, most of them on Jio.

“However, CMR believes that only 40-45% of the existing Jio subscribers will continue to use their services after the ‘Happy New Year’ offer expires by  March 31st, 2017,” the market intelligence and survey firm said in the context of an analysis of the potential of ‘4G feature phones’ in India.

Given that India is likely to add another 139 mln smartphones before the year is out, the total 4G users in India could jump to 235 mln by the year-end it predicted. However, the attrition of free 4G subscribers from Jio’s network at the end of this month would reduce the number by 60-65 mln, the firm predicted.

However, CMR also expects 4G feature phones to become commonplace soon and these would add around 53 mln 4G voice subscribers this year, taking the total 4G users to about 220-225 mln.

At present, only one vendor, Lava, has come out with a 4G feature phone, and only one network — Reliance Jio — supports 4g feature phones.

Lava’s M1 Connect, which comes with a 2.4 inch display, is priced in the Rs 3,000-3,500 range, but the price “should have been in the range of Rs 2,000 – 2,500,” CMR said.

CMR expects the 4G feature phone category to be dominated by Indian brands, which will stage a comeback — at least in the sub-Rs 5000 category — riding on this form factor.

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