Reliance Jio to withdraw Rs 399 plan next week

Most customers of Reliance Jio, the country’s largest telecom operator by volumes, will not be able to get the 84GB-for-399 plan starting next month, the company’s deputy chief financial officer V Srikant said on Friday.

Asked how the company’s average revenue per user (billing rate) is likely to move going forward, Srikant said it was difficult to predict as the company’s most popular 84-GB offer will be not be available to most customers. Technically, the plan is valid only for the first recharge, and becomes a 28-day scheme subsequently, he explained.

“We offer a 28-day valid recharges with 1 GB data per day for Rs 399,” he said. “Effectively a customer gets to use the same facility for 84 days. As this offer will come to an end by November, we should be getting a better picture on our revenues,” he said soon after the company revealed its financial performance for the July-September period.

The Rs 399 plan — which offers 84 GB of 4G data and unlimited voice calls for as many days — is by far the most popular plan among Jio customers at present.

In effect, the plan costs only Rs 145 per month, and the majority of the company’s subscribers are learnt to be on the plan. Not surprisingly, therefore, the company said the average bill amount for a single customer on its network was Rs 156 for the July-Sept period.

Jio has a plan to raise this to about Rs 300 eventually.

However, it may soften the transition by introducing new tariff schemes that are priced higher than the existing offer, but below the full pricing.

The company has already announced that it will reveal a new set of tariff plans on Thursday, and these will more or less certainly be costlier than existing plans.

If, for example, it withdraws the 399 scheme and cuts the validity of the 309 plan to 28 days, the average billing amount (ARPU) will increase to Rs 337 from the current Rs 156.

However, it is likely to cushion the transition by offering an intermediate plan that provides the same benefit for about Rs 225 or so per month. This can be achieved by cutting the validity of the 399 offer in half to 45 days even as the 309 plan’s validity is brought down to 28 days.

Jio’s new plans and packs will be revealed on Thursday, and the company has urged its customers to recharge their numbers before that.

To encourage them to recharge this week, the company is giving cash-back coupons of Rs 50 each, which can be later used to buy talk time or data.

Any move by the company to raise prices will be accompanied by similar moves by rivals such as Bharti Airtel and Idea Cellular.

These players also currently offer 84 GB and unlimited calls for Rs 399 to most of their 4G-enabled customers.