Reliance Jio Loses Customers For The First Time
Reliance Jio’s active customer base declined in November 2019 for the first time since it began operations three years ago.
India’s youngest telecom operator’s active customer base declined in November 2019 for the first time since it began operations three years ago.
That could largely be on the back of Reliance Jio Infocomm Ltd.’s decision to start charging customers for voice calls. The number of active users on its network declined by nearly 24 lakh two months ago, according to data compiled by BloombergQuint from the Telecom Regulatory Authority of India.
The Mukesh Ambani-backed telecom operator has been adding, on average, 78 lakh users every month for the last 37 consecutive months. It managed to do so by first providing its services free and then offering dirt-cheap plans to customers.
Sunil Mittal-backed Bharti Airtel Ltd. added active users on its network for the second consecutive month. Its subscriber count grew by nearly 37 lakh. Vodafone Plc. and Aditya Birla Group controlled Vodafone Idea Ltd., on the other hand, lost active subscribers for the 19th straight month. Its active subscriber base declined by 30.6 lakh in the month and has, in 19 months, lost close to 12.1 crore active users.
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A higher number of subscribers actively using an operator’s services doesn’t translate into higher revenue. It can mean, at the very least, that the customer is frequently using its services and the risk of losing that user is low. Broadband users, or the customers which predominantly use data, generate high revenue for operators.
Bharti Airtel also managed to outpace Reliance Jio on broadband subscriber addition for the first time in 10 months. Reliance Jio, which operates only 4G network, added 56 lakh broadband users, compared with Bharti Airtel’s 71 lakh. Vodafone Idea added 41 lakh users—the highest in 12 months.
The subscriber gain for Bharti Airtel came on the back of its improved network and competitive plans.
The entry of Reliance Jio proved a turning point in the Indian telecom market, after it stormed in with free voice services for life and free data services to lure subscribers, prompting smaller rivals to merge or quit the market.
The company, which was on the verge of becoming India’s largest telecom operator by active subscriber base, has seen a setback. Reliance Jio’s market share dropped by 18 basis points, while that of Bharti Airtel increased by 45 basis points.
The loss in active subscriber base for Vodafone Idea has further lowered its market share to 30.5 percent.