Reliance Industries-owned telecom operation Jio has been trouncing its counterparts in several metrics ever since its launch. Now, according to a study by Kleiner Perkins, San Francisco-based venture capital firm, the average revenue per user (ARPU), which includes voice, data, and value-added services on Jio network is $4.70 or Rs. 303 approximately. To put in perspective, the average ARPU of incumbent players like Bharti Airtel, Idea, and Vodafone was $2.83-3 during the financial year 2015-2016.
The report also stated that Jio was able to convert 72 million of the total 108 million customers as Prime membership subscribers till March 31 2017. It is a great feat as the cost for Prime membership is well above the average ARPU of incumbent telecoms.
The firm said data tariffs have nose-dived after the launch of Reliance Jio on November 8 2016. At present, the average cost of 1 GB data in India is $1.9 (Rs. 122.5), which shows a decline of 48 percent in a year. It is worth noting that Jio offers 1GB high-speed data for just $0.17 (Rs. 11) per GB.
As a fallout, the annual revenue of telecom operators plummeted to Rs 1.88 trillion in 2016-17 from Rs 1.93 trillion in the previous year. The revenues may further decline as Reliance Jio entered the market in the second half of 2016-2017; however, this year the impact is from the start of the financial year.
If Jio continues to implement the strategy of gaining customer base, the incumbent players may further bleed customers as well as revenues. A research by CRISIL predicts that telecom ARPUs will hit a five-year low of Rs 150 and revenues of incumbents will fall by 10 percent year-on-year.