“Jio should see an ARPU dilution of 8-10% sequentially in the April-June period following its decision to waive the Rs 99 renewal fee for all existing members,” said Naveen Kulkarni, telecom analyst at PhillipCapital.Another senior analyst, who did not wish to be named, estimated an “11-12% on-quarter ARPU fall” since Jio had “recognised the one-time Rs 99 annual membership fee from existing Prime customers on an accelerated basis”. “While Jio recognised the annual membership fees of existing Prime customers who came on board in April 2017 over a 12-month span, there were many customers who possibly opted for Prime as late as December 2017 or January/February 2018, whose onetime membership fees were recognised in just 2-4 months, which aided the company’s healthy ARPU growth in FY18,” he said.Accordingly, Jio’s ARPU fall in the first quarter of FY19, he said, is likely to be sharp, as “this revenue will go off the April 1, 2018, following the free extension for existing Prime members. Analysts reckoned Jio’s monthly ARPU in the fiscal fourth quarter ended March 31 could see a near 7% sequential dip to Rs 143-144 — from Rs 154 in the October-December quarter — following its ultra-low Rs 49/month offer to JioPhone users and its equally aggressive Rs 98/month entry level 4G price plan unveiled in January. At press time, Jio did not reply to ET’s queries.The 4G newcomer had started enrolling Prime customers from April 2017 for a one time entry fee of `99 when it started charging for data services, and the loyalty programme was scheduled to expire on March 31, 2018. The country’s beleaguered telecom industry has remained in the grip of fierce price wars following Jio’s entry over a year back, and is saddled with a whopping Rs 8 lakhcrore of debt.Unlike Reliance Jio’s strong ARPU of Rs 154 in the October-December quarter, Bharti Airtel’s fell to Rs 123, while both Vodafone India and Idea recorded ARPUs of `114 each, hit by the cut in interconnect charges, which exacerbated pressures on their voice and data businesses amid continuing price competition.

Source: Economic Times April 02, 2018 02:03 UTC