How Mukesh Ambani Stopped Customer Churn With Jio Prime

RIL Chairman Mukesh Ambani, on 21 February, announced that it has acquired 100 million customers since launch and launched a new scheme called Jio Prime. Acquiring 100 million customers in just 170 days is no small feat, in fact, it was the fastest pace any operator added customers in such a short period.

According to Ambani, Reliance Jio added 7 customers every second through out that 170 days, and the pace surpassed the customer acquisition speed of internet biggies like Facebook or WhatsApp.

However, these mammoth customer number in such a short period was possible, simply because Ambani offered his services free of cost to the customers. So it was no big achievement to have that number of customers who are on-boarded free to the network.

But analysts earlier felt that once Jio starts charging for its services, customers may not like to stick to Jio and there would be huge drop-out of customers from the Jio network. Some earlier reports also suggested that most of the Jio users are considering a Jio as their secondary number. Means, these customers will always have their primary connection, be it of Airtel, Vodafone or Idea, or some other, and use Jio services as a standby, and as long as it is free.

However, the same may not be case anymore with the launch of Jio Prime, despite it being a paid service.

How Jio Prime Changes The Game
During its 100 million customer celebration, Mukesh Ambani also announced that from 1 April Jio services will not be offered free. It will be charged and customers will have to pay for it. And this had been the long standing demand of the industry as well as other operators that Jio should not offer services for free, which is directly affecting the financial health of, one, the industry and, two, the operators. The telecom services industry, led by its association COAI, and spearheaded by top three operators – Airtel, Vodafone and Idea – had been complaining about Jio’s services being free and even knocked the government’s door asking for a redressal and to create a level playing field.

Jio on 21 February forced them to shut their mouth and not crib anymore. It launched its new service offering through a scheme called Jio Prime. The Jio Prime asks the customers to register for the prime membership by paying a fee of Rs99. Once you are a Prime member, you can avail all the existing services, that were earlier offered free, by paying a monthly charge of Rs 303.

What exactly does this mean?
To a Jio customer, it means the services still remain free, almost. You use two things on a smartphone – one, make voice calls, and two, use data for all other purposes – be it surfing, social media, gaming, texting, ‘whatsapping’ and all others.

Anyways, the voice calls are free on Jio. That means you can make free voice calls to any network absolutely free. This is not free with any other operator, yet. That takes care of one of your prime needs – making calls. Second, by paying Rs 303 under Jio Prime scheme you get unlimited data consumption for the entire month. To be more precise, a customer gets 1 GB of free 4G data per day. That means 30 GB of free 4G data a month. And it costs just Rs 303 or Rs 10 per GB. No other operator matches this rate. The closest cheapest operator is BSNL that offers 1 GB 4G data at Rs 36.

It means with Jio Prime both the needs a customer is sorted, that too with a recharge of Rs 303.

Why Customers Won’t Quit Jio
During the free period, Ambani said, Jio customers consumed 100 crore GB of data per month, or 3 crore GB a day. This free offer of data has made consumers addicted to data consumption. If addiction is an exaggerated term, then they, for sure, have realized the value of data. And customers would not shy away from this anytime soon, or never. The hunger will, in fact, grow.

So, it may possible, that the existing Jio customers would like to stick to the operator as they will be getting 30 GB of data for the monthly price. It may also possible that they will not dump their other number, be it from Airtel, Vodafone or Idea.

That apart, tariff plan under the Jio Prime scheme is simple as against that of other operators. Customers are still confused which plan should they buy that give them best value for their money. In Jio Prime, they know they will get 30 GB of 4G data for Rs 303.

Challenges for Jio

Jio, for sure, is not going to walk in a park in the coming times. Though there is high probability that its customers will not move out of its network, Mukesh Ambani, however, can not be complacent, which, the businessman he is, will not be. The big challenge of Jio network is its voice network. A phone does not remain a phone if it can not make a call, which has been an issue with the new operator. Most of the cases, when someone switches off his Jio services or connects to other data network, Jio’s voice network does not work properly. At times, does not work at all.

In order to keep the Jio Prime members stick to the network, and for Mukesh Ambani to celebrate next 100 million customers, the operator, has to work tirelessly to maintain the voice network in a robust stage.

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