Info-tech

RJio eyeing bigger foothold in postpaid with new plan launch: Reports

Our Bureau Mumbai | Updated on September 23, 2020 Published on September 23, 2020

The launch of new postpaid plans by Reliance Jio Infocomm (RJio), a wholly-owned subsidiary of Reliance Industries Ltd (RIL), is its second attempt to get a foothold in this lucrative market and raise consumer market share, according to multiple brokerage reports.

RJio’s new tariff plans will be offered at a higher starting price of ₹399 per month, compared with its previous plan starting from ₹199. However, the big difference is that RJio is now offering premium content (Netflix, Prime Video and Disney+ Hotstar) at an affordable price, BNP Paribas said in a report.

Individually, Netflix (mobile only) costs ₹199 per month, while Prime Video and Disney+Hotstar VIP cost ₹999 and ₹399 per annum, respectively. Thus, for consumers who are looking to subscribe to these OTTs, content worth upwards of ₹300 per month is bundled in the ₹399 per month plan, it said.

On Tuesday, RJio, a wholly-owned subsidiary of Asia’s richest man Mukesh Ambani-led RIL, launched five tariff plans under its new JioPostpaid Plus. Till date, RJio had only one postpaid plan, of ₹199.

READ THE STORY: RJio expands presence in post-paid segment with JioPostpaid Plus

RIL’s bid to raise consumer market share continues after it launched aggressive postpaid plans that were cheaper than incumbent offerings, according to a Morgan Stanley report.

This comes after the reduction in broadband tariffs late last month. While RIL’s prepaid offering has been one of the most value-for-money offerings, post-paid and broadband have been areas where customer acquisition has been slower than anticipated.

“We believe this should be supportive to RIL broadening the reach of its digital ecosystem, it but will raise investor concerns on ARPU raise being slower than Street estimates,” the Morgan Stanley report added.

According to CLSA, RJio’s new post-paid plan is a tariff increase of 100 per cent from the existing plan.

“Also, while RJio’s new plan is bundling three leading OTTs but with no content exclusivity, such offers can be matched by incumbents. For all three operators, pre-paid tariffs are 55-65 per cent cheaper than post-paid, so migration by price-sensitive subscribers is unlikely. We await the consumer response to RJio’s new offers and incumbents’ retaliation. Meanwhile, sector ARPU growth presents opportunities for all telcos,” CLSA said.

“With less than 1 per cent of its subscriber base on postpaid plans, RJio has revamped its post-paid offering to gain traction in the segment. We highlight that India is largely a pre-paid market, with 95.5 per cent of the subscribers on prepaid plans. However, postpaid is a premium segment, accounting 20-25 per cent of mobile revenues of Bharti Airtel and Vodafone Idea and is also less prone to churn,” Credit Suisse said in a report.

“Hence, we think RJio, after attaining market leadership in the prepaid segment, is now focusing on the postpaid market, as it looks to improve its ARPU (and thereby revenue) trajectory,” it added.

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Published on September 23, 2020
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