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In the fast lane.
MAKING WAVES

As its freebie period ends, Ambani’s Jio unlikely to lose many subscribers: Study

By Ananya Bhattacharya

Reliance Jio has cast its spell on India, and how.

Last September, Mukesh Ambani launched mobile telephony services with much fanfare. The newest entrant in India’s competitive $50-billion telecom sector promised customers the world’s cheapest internet data at Rs50 ($0.7) per gigabyte, one-fifth of what it cost on an average then. Until the end of 2016, Jio customers also enjoyed all the services—data, voice calls, and messages—for free. Following a resounding success, India’s richest man had a surprise in store for Jio loyalists. He extended the freebies until March 31, 2017.

At the end of this month, customers have a decision to make: to Jio or not to Jio.

And it looks like Ambani has reason to rejoice. A survey of 1,000 Jio customers by Bank of America Merill Lynch showed that at least 84% of them are likely to subscribe to its Prime offering starting April. Another 12% plan to stay on with a non-Prime plan. In any case, Jio is only likely to add more users ahead of its March 31 deadline.

A Prime subscription entails an introductory one-time fee of Rs99 ($1.50) and Rs303($4.63) monthly payments for the 1GB-per-day 4G service and complimentary access to bundled apps worth over $150 for a year. Nearly 70% of those looking to switch to Prime from their current free service chose this as their preferred plan. Even among users who do not want Prime’s perks, a majority, 42%, opted for the Rs303 plan.

Some 66% of customers were using Jio as their primary connection by March, up from 50% during the December survey. A quarter uses it as the secondary sim.

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Meanwhile, over the last three months, the company has tried to curb patchy voice calls. At the end of 2016, around 34% of people said it was very difficult to get through to other networks. Only 19% had a problem with calls at the time of the March 2017 survey. Once it goes through, 43% felt Jio’s call quality was on par with other networks’; 57% said it was superior.

And guess who is taking note.

Competition

The disruption caused by Jio is a healthy change from an otherwise antiquated and saturated market.

In the new year, telecom giant Bharti Airtel began dishing out 12 months of free 4G services while government-run Bharat Sanchar Nigam (BSNL) offered unlimited local and national calling and 300 MB data for a mere Rs144 monthly till June 2017. Meanwhile, Vodafone and Idea have announced a merger.

Ambani claims his company has grown faster than Whatsapp, Facebook, and Skype. Whether the hype lasts or not is a question that’ll be answered starting next month.