Reliance Jio Infocomm is likely to have well over 400 million customers by March 2020, including nearly 150 million JioPhone users, helped by big gains in rural markets, said analysts. They expect parent Reliance Industries to shortly deploy an omni-channel strategy to cross-sell a mix of retail products and telecom and digital content services.
CLSA estimates Jio’s subscriber base to be 414 million by March 2020, which would be equal to 45% of India’s population in the 14-to-80 years age group. The foreign brokerage also estimates that the telecom and retail businesses will contribute as much as 80% to the parent’s consolidated Ebitda growth through FY18-21.
Jio’s June-end subscriber base was a shade over 215 million based on data collated by the telecom regulator.
Analysts believe Jio’s high average customer engagement level of 290 minutes a day, coupled with the prospect of some 150 million subscribers using the JioPhone — the 4G featurephones supplied by Reliance Industries — can be tapped to generate sizeable ad revenue opportunities.
“The Reliance-controlled Kai-OS operating system of the JioPhone can be particularly used to leverage Jio’s high customer engagement to open up advertisement revenue opportunities,” CLSA said in a note seen by ET.
The JioPhone is already India’s largest-selling phone in the below Rs 1,500 price range, with as many as eight out of every 10 phones of sub-Rs1500 devices sold being the RIL-owned 4G featurephones. Analysts, in fact, expect Jio’s subscriber base to grow rapidly once the messaging app WhatsApp is available on the Jio 4G devices.
WhatsApp has just designed a new version of its messaging app for the JioPhone, which is expected to help the Mukesh Ambani-led telco grab more customers and revenue share from rivals Vodafone Idea and Bharti Airtel. WhatsApp will be rolled out on all JioPhones by September 20.
Brokerage IIFL Institutional Equities said JioPhone users in rural markets already spend over an hour daily watching videos despite the small screen size, and “data consumption is likely to rise once WhatsApp, Facebook and YouTube apps are available”.
Reliance Retail, which launched the JioPhone, said users of the company’s 4G featurephone “are spending more time than smartphone users in using the Internet and apps”. It added that “the number of voice commands used on a JioPhone now surpasses that on a smartphone by as many as five times”.
Analysts expect Jio’s content apps — Jio TV, Jio Cinema, Jio Music, Saavn, Jio Mags, Jio Chat to Jio Money — to be shortly ripe for monetisation, given that the company’s user base is already habituated to use over 10 GBs a month, coupled with the likely rise in fixed-line broadband users, post-commercial rollout of the Jio GigaFiber home broadband services.
CLSA telecoms analyst Vikas Jain expects Reliance to also beef up “the ecommerce extension of its established organised retail business in coming months, which would allow it to take a bigger share of the consumer’s wallet via its omni-channel grocery, fashion and digital retail offerings”.
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