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Published on 20/07/2019 11:48:55 AM | Source: HT Media

Opinion | Reliance Jio`s surge

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Mukesh Ambani-controlled Reliance Jio has vaulted past Bharti Airtel to become the country’s second-largest mobile telephone company by user base. Considering Jio’s growth strategy, this was inevitable. Jio launched its commercial services—entirely on 4G technology—in September 2016, signing up millions of subscribers in a matter of moths with its initially-free data and voice service. The latest data put out by the Telecom Regulatory Authority of India shows Jio has about 323 million subscribers, as of 31 May, ahead of Airtel’s 320.4 million and behind Vodafone Idea’s 387.6 million users.

At this rate, Jio’s use base could go on to overtake Vodafone Idea’s in the not-too-distant future. Jio’s exponential growth has been driven by aggressive pricing, but that’s only part of the story. The new entrant offered such fabulous data speeds and voice services that it made the offer basket of pricier incumbents look slow and patchy. Customer complaints of call-drops and internet snap-offs have bedevilled many of the older players in recent years. The price war unleashed by Jio has led to record losses in the telecom industry, forcing some players to the brink. The once-crowded telecom space now has only three large private players, and the state-run MTNL and BSNL are hardly seen in market contention anyway.

The ongoing surge in Jio’s subscriber base has a lot to do with Vodafone Idea and Airtel introducing service validity vouchers, which require users to pay a minimum recharge sum to continue using their networks. What users want, though, are reliable networks as a minimal guarantee; and with 5G around the corner, network quality differences could yet become stark.