Reliance Jio says Prime to remain free for existing users; Rs 99 for new users


Reliance Jio Infocomm (Jio) on Friday said that while existing Prime subscribers will retain their annual membership at no additional cost, new ones will have to pay Rs 99 to become a member for next twelve months. This move by the telco may help prevent subscribers from deflecting to other operators who have been matching Jio’s offers.

“The continued availability of the Jio Prime membership to new subscribers reiterates Jio’s commitment to deliver a differentiated Digital Life experience to Indians and will propel this into the world’s largest loyalty programme,” said the telecom firm in its statement on Friday.

Prime subscribers, are the set of customers who have taken up the one-time annual membership fee of Rs.99. Jio started enrolling Prime members last April onwards, with subsidised and additional benefits, and the membership’s time line was to expire on March 31.

Jio on Friday said that the new membership at same price of Rs 99 , will ensure that the members will get 20-50% more benefit on the telco’s latest offers

Initially, Prime membership was offered for a limited period but later the operator continued with it to attract and retain subscribers. Unique to Jio, incumbents do not have a membership -fee model of business wherein those who sign up get benefits.

Jio today, has more than 168 million customers and almost all of them are Prime members. The telco as of December quarter has a revenue market share (RMS) of around 15% compared to market leader Bharti Airtel’s 31%. The telco, which started its services in September 2016, is close on the heels of Idea Cellular that has an RMS of 16.4%, while Vodafone has garnered an RMS of 20.4% in the December quarter.

With tariff wars raging for the last sixteen months telecom operators including Jio have been boosting their content offerings and this is where an extended Prime membership will help the new operator to get more customers hooked on to their latest offerings.

A week ago, parent company Reliance Industries (RIL) has signed a pact to merge music app Saavn with its own digital music service JioMusic in a cash-and-stock deal to create a $1 billion entity in which the Mukesh Ambani-owned company will hold over 75% stake in a bid to boost the content play of Jio.

The operator that has built its entire network on VoLTE, forcing incumbents to play catch up on their 4G network has also been building its war chest. To part fund its capex needs, which includes the roughly Rs24,000-Rs25,000 crore that it will pay RCom for wireless assets including spectrum, towers, optic fibre and switching nodes, the company’s board approved raising Rs20,000 crore of debt in tranches.

RIL’s decision to raise funds comes a few days after market leader Bhati Airtel announced plans to raise Rs 16,500 crore via the debt market to refinance existing debt and pay for spectrum.

Jio spent some Rs7,000 crore as capex in the October-December quarter and has said it expects capex levels to be similar in the ongoing January-March quarter as well.

 

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