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'Jio's Prime scheme not driving demand pick up'

The monthly subscriber report released by telecom regulator Trai for March shows that Reliance Jio's low price 4G mobile service scheme Prime is not driving demand for its connections, while incumbents have gained, UBS Securities Asia said.

'Jio's Prime scheme not driving demand pick up'

New Delhi: The monthly subscriber report released by telecom regulator Trai for March shows that Reliance Jio's low price 4G mobile service scheme Prime is not driving demand for its connections, while incumbents have gained, UBS Securities Asia said.

"March momentum favours incumbents, Jio Prime not driving demand pick-up. We are surprised to see lack of acceleration in March since Jio Prime offer was announced in the month. April was the first month of Jio's paid services and would offer further insight into customer conversion and migration from incumbents to Jio," UBS said in its report.

Jio's Prime plan starts at Rs 309 per month under which consumer get 1 gigabyte of 4G mobile broadband services everyday along with unlimited calling to any network.

According to subscriber report published by the Telecom Regulatory Authority of India, the new entrant Reliance Jio, which is now the fourth largest telecom operator in the country, continued to drive growth in mobile telephony segment with net addition of over 5.83 million mobile customers. Its closest rival Bharti Airtel's net subscriber addition was over 2.99 million customers in the reported month.

Idea's net addition was over 2.09 million customers, which was closely followed by BSNL which added 2.07 million new customers. Vodafone added 1.83 million new connections in March.

"As per the March subscriber data released by TRAI, Jio reported net adds of 5.8 million versus 12.2 million in February," the report said.

UBS sees the shrinking incumbents gained in March with Vodafone recovers broadband subscribers in March, Airtel continues to expand broadband penetration with 22.1 per cent share from 20.9 per cent in February.

"Vodafone gained market share with net adds of 5.7 million broadband subscribers. Airtel's pace of broadband net adds also increased to 2.4 million versus 1.1 million in February. Idea reported increase in broadband subscriber to 24.7 million reversing the trend of decline in January and February," the report said.

Porting requests saw small increase on sequential monthly basis to 6 million but remains small as percentage of total subscriptions. UBS said that it expects pick up in porting request in April as Jio starts charging.

"While the data for April and May will be more significant given Jio has started charging since April, overall trends suggest Airtel continues to hold a firm footing in the Indian mobile market with key operating metrics outperforming peers. Vodafone and Idea have also shown recovery in March after under-performing Airtel in January and February," the report said. 

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