Mumbai, India: Reliance Jio, India’s leading telecom operator, is experiencing a unique post-tariff hike scenario. While the company witnessed a significant drop of 10.9 million subscribers in the second quarter following a price increase on recharge plans, analysts believe this might not be a cause for major concern.
Industry experts point out that a dip in user base is a common phenomenon when service providers adjust pricing structures. Customers may switch to competitors offering seemingly better deals in the short term. However, Jio’s strategy appears to be a calculated one, prioritizing profitability and 5G network expansion over absolute subscriber numbers.
This is evidenced by the surge in Jio’s 5G subscriber base. Since the tariff hike, the company has seen a remarkable rise of 17 million 5G users, bringing the total to a staggering 147 million. This indicates a shift in Jio’s customer focus towards high-value users willing to pay a premium for faster data speeds and advanced network capabilities.
Furthermore, Jio’s Average Revenue Per User (ARPU) has increased from ₹181.7 to ₹195.1, demonstrating the effectiveness of the revised pricing strategy. This translates to higher revenue even with a smaller user base.
Jio acknowledges the decline in subscribers but maintains a confident stance. The company emphasizes its commitment to providing the best 5G network experience and exploring innovative solutions like Fixed Wireless Access (FWA) to connect households efficiently.
While some users may migrate to other operators attracted by lower headline prices, Jio views this as an opportunity for competitors to absorb less engaged customers, ultimately allowing Jio to focus on a more profitable subscriber segment.
As reported by India.com