Reliance Jio Prime membership subscription to end on March 31: What next?

Jio Prime subscriptions, started April 1 last year, expire on 31 March. Now, with the expiry approaching, it is expected that Jio would make a new announcement sometime soon.

Business News : Reliance Jio shook the Indian telecommunication space with the launch of its affordable, data-centric network. After doling out freebies for more than the first six months since the launch, the Mukesh Ambani-owned telecom major introduced Prime membership at Rs 99 with the promise of offering subsidised recharge options and additional benefits for a period of one year.

The Jio Prime membership, which came into effect on April 1 last year, are valid until 31 March. Now, with the subscription expiry approaching, it is expected that Jio would make an announcement sometime soon.

While there is nothing official yet, it is expected that the company might completely do away with the Prime subscription or offer it as a free service.

Here is what the company offered in the first iteration of the Prime membership:

• Free unlimited data and voice services for one year at an effective price of Rs 10 per day
• Special recharge plans with additional data and validity
• Free VoLTE-based voice calls to any network, even on roaming with no black out days either.
• Free access to Jio app suite

The Prime membership was initially rolled out as a loyalty programme to retain subscribers as the company moved from free to paid services.

In the first leg, the Prime membership was advertised as a limited period offer. However, as time moved, the company continued offering the membership to get more subscribers. Now, according to Jio’s official portal, there is no mention of services that the company offers to non-prime subscribers. Therefore, it is safe to assume that the subscription based membership program may eventually fade out.

Jio vs The Rest: Next round of telecom sector consolidation has just begun

From an industry that had a profit after tax of 15% of its revenues in 2007-08, its losses hit more than Rs 180 bn in 2016-17 even though the revenues doubled in the same period.

Business News India : For a customer using a mobile phone since 2007, it has been a dream run with voice calls now becoming free and unlimited compared to Rs 1 you had to fork out in 2007. Now you pay only for data at rock-bottom prices and monthly bills have dramatically halved in the past 18 months.

Yet in stark contrast, the story of telcos in the last decade has been a topsy-turvy downhill battle, bruised by cut-throat competition, policy paralysis and Central Bureau of Investigation probes, high spectrum prices, and the stick of the Supreme Court, which cancelled over 122 licences. But the incumbents have also faltered, misreading the dramatic change which 4G data would unleash, thanks to the entry of Reliance Jio.

From an industry that had a profit after tax of 15 per cent of its revenues in 2007-08, its losses hit more than Rs 180 billion in 2016-17 even though the revenues doubled in the same period. And its debt burden just went through the roof, increasing five-fold through the decade, which is close to double its overall revenues (see chart). As a result, many telcos like RCom that were unable to pay back loans sold their assets or, like Aircel, filed for bankruptcy.

The inevitable impact was that as many as eight companies such as STel, Loop, and Etisalat closed down operations, some like Telenor and MTS, which tried once again by acquiring the licence for a second time, failed miserably again. And desi players like Tata Teleservices and RCom that could not take the heat of competition unleased by the entry of Jio also called it a day. Together, estimates say, they lost more than Rs 1,500 billion in cash.

Jio hastened the consolidation by its disruptive pricing, and now analysts say there will only be four players — Bharti, Vodafone-Idea, Jio and BSNL.

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