Reliance Jio promises new plans in place of Summer Surprise

The new banner on RJio website

Reliance Jio has officially withdrawn its Summer Surprise offer on its website and put up a new banner saying that it will be introducing new plans soon.

“We are updating our tariff packs and will be soon introducing more exciting offers,” the company says on its website in place of the Summer Surprise details, as predicted.

The free service plan that it had promised from Apr 16 to Jul 15 is no longer open to new sign-ups, but will continue for anyone who recharged with its daily data packs till Sunday.

Tens of millions of people signed up for the Summer Surprise offer in the ten days that it remained open.

The scheme was pulled after the Telecom Regulatory Authority of India ‘advised’ the operator to withdraw the hybrid pay-cum-free offer it did not fit any of the categories of recharges that the regulator recognizes.

According to India’s telecom tariff rules, a recharge or pack has to be either a simple balance top-up, a plan recharge — which changes data, SMS and voice rates — or a special tariff voucher, which changes only a specific tariff.

TRAI was reportedly said the offer — which gave three months free with the purchase of one month of a plan — fitted into none of these categories. Moreover, the Summer Surprise was not filed with TRAI as a new offer either.

BIGGER REASONS?

According to industry sources, there could deeper reasons for the crackdown.

Rival operators such as Bharti Airtel, Idea Cellular and Vodafone, owe lakhs of crores of rupees to government-controlled banks. In this context, it was ‘suggested’ to the government that if the new comer continued to disrupt the market using free services, their financial condition will deteriorate, impacting their ability to repay the money.

Moreover, earlier in the year, it had reportedly been agreed that between all parties that Jio will not extend its free services — which began in September 2016 — beyond March 2017.

Given TRAI’s ‘advice’, it is likely that the Mukesh-Ambani led company will no longer offer free services but will provide super affordable tariffs that its rivals will not be able to match.

Its second set of tariffs, unveiled in early March, was already super affordable and below anything the industry had seen.

These plans provided 1 GB of data per day for Rs 303 per month and 2 GB for Rs 499, in addition to free voice calls. Before the new operator’s launch, such a plan would have cost thousands of rupees per month.

None of the rivals, except 3G player BSNL, have been able to match the plan as of now.

Although the others have unveiled similar tariffs in the Rs 350 price range, they are all restricted by various terms and conditions.

While some divide the data equally between day and night, others restrict the schemes to ‘select users’ that they identify. Similarly, at least one operator requires the user to have a 4G handset to avail of such offers.

POOR RESULTS AHEAD?

It is believed that Jio’s offers have wreaked havoc on the finances of Bharti Airtel, Vodafone India and Idea Cellular in the January-March reporting period.

These operators will detail their financial performance — and the impact of Jio’s freebies — in the second half of this month.

It is possible that they will report a 25% decline in their revenue and a 30% decline in their revenue-per-subscriber for the January-March quarter compared to pre-Jio levels. This is likely to push them into losses for the quarter.

Jio is estimated to have already saved around Rs 18,000 cr in terms of voice and data charges for Indian telecom users, which has impacted these firms’ profit margins.