Jio sees a slowdown in customer addition due to bad customer experience, may miss 100-million target

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Slowing data speeds and weakening customer experience has resulted in a slowdown in customer addition for Reliance Jio Infocomm, which now could miss its target of reaching 100 million 4G customers by December-end, according to a note by Motilal Oswal, which estimated the telco’s pan-India customer base at 35-40 million.

The brokerage said that the Mukesh Ambani-led telco’s subscriber run rate has also gone down below 50% due to challenges such as VoLTE handset availability and demonetisation, which has led to a drop in footfalls at retail outlets.

It also sees a high risk of subscriber churn for Reliance Jio as most its customers are using the telco’s connection as a second SIM to take advantage of its freebies. According to various other reports, a majority of Jio customers are also using services from Airtel, Vodafone and Idea Cellular.

Due to the current high usage levels by customers, customer experience on the telco’s network had deteriorated, the brokerage said, adding that Jio outlets have started receiving complaints that data speeds are down by 70-80% over three months since its September 5 launch.

Jio’s low-end VoLTE smartphones are ill equipped to provide genuine 4G experience, thereby impacting the overall usage and experience, the brokerage said.

Motilal Oswal also said that Jio is likely to extend its free voice and data services till March in a bid to reach its 100 million user target. In a bid to target mass-market customers, Jio is likely to launch new price plans in the Rs 200-to-300 ARPU bracket, the brokerage said.

According to a recent report, Jio is looking to launch feature phones with voice over LTE (VoLTE) capability to tap the rural and tier-III markets for its data services and mobile business. The pricing for these devices could be as low as Rs 1,000 and will come bundled with unlimited voice and video calling, alongside digital content.

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