In his speech, Mukesh has clearly given a call to the users to pay only for DATA services and not for the Voice services.
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A report by Bank of America Merrill Lynch shows that Jio could corner around 22 per cent of the estimated 47 million 4G subscribers by the end of 2016-17, and its share could go up to 32 per cent by 2021-22 on a total subscriber base of 264 million.
“RJio has disrupted industry pricing more than we imagined, with consequences for incumbents likely more hard than we expected”, said George, who trimmed his price target on Bharti Airtel to 290 rupees from 335 rupees, and that on Idea Cellular to 85 rupees from 100 rupees. He also dedicated this Jio to all his fellow Indians.
The offer is now being rebranded as a “welcome offer”, which from September 5 will provide unlimited services till up to December 31, after which users have been promised voice calls – both local and STD – as well as roaming free of cost, for life. In one Reliance Digital store in Bengaluru, the demand for the Jio SIM was so high that people had lined up outside the store even before the doors were open.
Bharti Airtel has over 250 million customers across India. But SIM cards ran out at many locations and technical glitches hindered activations.
It appears that a lot of potential RJio users are walking into Reliance Mobile Stores, which are operated by R-ADAG Group’s telecom entity Reliance Communications (RCom), to inquire about the 4G sim card and related subscription plans. It will buy you subscription to Jio Apps worth Rs 1,250.
Sharma said that RJio’s free voice calling and SMS services and data bundle offer, could hurt the voice tariffs of existing operators, who would need to respond with similar offers in a bid to protect their turf. The growth will be led by the increasing penetration of low-priced 4G devices and rapidly growing eco-system of content, aided by falling data prices, according to an Economic Times report. Ltd expect meaning customers of incumbent players moving to Jio due to its strategy.
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“Rising competition will lead to downward pressure on data tariffs at a time when capital expenditure will have to increase to support rising data consumption as cheaper 4G handsets become available”, Fitch said.
