Home >Industry >Telecom >Jio unleashes new postpaid tariff war

Reliance Jio on Tuesday unveiled a slew of new postpaid plans for mobile users in an attempt to lure customers from its rivals in this most profitable segment for telecom operators. The new plans will be bundled with subscriptions such as Netflix, Amazon Prime and Disney + Hotstar.

Jio, the telecom unit of Reliance Industries Ltd, also introduced offers for postpaid mobile users of other telcos to carry over their credit limit to the Jio network if they port to Jio connections, along with home delivery of new SIM cards.

The latest move by Jio comes at a time when telcos are struggling to find ways to increase tariffs in an intensely competitive and price-sensitive market.

According to data from the Telecom Regulatory Authority of India (Trai), just about 5% of wireless subscribers are postpaid users, but they generate around three times higher average revenue per user (Arpu), when compared with prepaid users.

In the March 2020 quarter, Trai reported postpaid Arpu of 244 compared with prepaid Arpu of 84.

According to industry experts, postpaid plans also foster better brand loyalty, a concern that Jio has struggled with so far.

Jio’s existing base of postpaid subscribers comprises just around 1% of its total user base who have an entry-level plan of 199 per month with 25GB data. In comparison, Vodafone Idea Ltd and Bharti Airtel Ltd have around 5-7% customers on postpaid plans.

“There can’t be a more opportune time to introduce JioPostpaid Plus. After having earned the trust of close to 400 million satisfied customers in the prepaid smartphone category, we want to extend our customer obsession to the postpaid category," said Akash Ambani, director, Jio in a statement.

The new postpaid plans called JioPostpaid Plus will be available from Thursday, and they will start from 399 per month with 75GB data, unlimited messaging and Netflix, Amazon Prime and Disney Hotstar subscriptions.

Postpaid plans at Airtel start from 499 per month plan, offering 75GB data and unlimited voice calling. Offers include a one-year free subscription to Amazon Prime, Zee5, and Airtel Xstream app. Vodafone Idea’s postpaid plans start from 399 which offers 40GB data along with 100 messages and unlimited calling for one month with free Vodafone Play subscription and Zee5 Premium access for a year.

Jio is also expected to launch affordable smartphones soon to complement its new postpaid plans.

According to a 21 September survey by Bofa Global Research, 68% of users indicated that they wouldn’t mind paying telcos 15-20% more for the same data allowances.

Telecom experts had expected a second round of tariff hikes from September after the recent Supreme Court decision on adjusted gross revenue dues. That has not happened yet.

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