Nearly 82 per cent of Reliance Jio users surveyed have expressed their willingness to continue with its services even after the free offers ends, a Bank of America Merrill Lynch survey on Friday claimed. In the same breath, the report said that incumbents, particularly Bharti Airtel, should be able to retain most of high-end subscribers given they provide better voice/customer service, but the Average Revenue per User (ARPUs) will come under pressure.
“Almost 82 per cent of the surveyed participants responded that they will continue with Jio connection even after the ending of the free offer. A further 15 per cent agreed to continue with Jio connection if the voice issue is fixed,” it said.
The findings are based on a survey conducted in the third week of March of 1,000 Jio users to gauge how the consumer behaviour changes after having experienced Jio services for almost six months and also in the wake of the announcement of the new Prime offers.
“Of the respondents planning to continue with Jio services, 96 per cent of subscribers plan to subscribe to Jio’s Prime offers, with Rs 303 plan as the most popular. However, 50 per cent of the respondents stated that they use Jio services because it is currently available for free, with higher data speeds accounting for 28 per cent of use case,” the report pointed out.
The report said the findings indicated a “decent interest” from consumers to continue with Jio service when the free offering ends this month. It added that 98.7 per cent of customers surveyed used a smartphone and 63 per cent of users had monthly bills of Rs 250 plus.
“Though our survey may not be representative of the broader market dynamics (as it is an online survey focusing mainly on mid-to-high end smartphone users), we note that this increases risks for incumbents like Bharti to retain high-end subscribers,” it said.
Bank of America Merrill Lynch said while it remains comfortable that incumbents particularly Bharti should be able to retain most of high-end subscribers given better voice and customer service, it sees “ARPUs (Average Revenue per User) under pressure as most consumers will stay back for lower ARPUs”. “…We see Bharti as being best positioned among incumbent telcos to compete with Jio, with industry leading subscriber share and data capacity…,” the report added.
(Disclosure: News18.com is part of Network18 Media & Investment Limited which is owned by Reliance Industries Limited that also owns Reliance Jio.)