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Jio extends freebie offer yet again

Location India. Red pin on the map.

Reliance Jio has extended the deadline for its latest subscription plan for an additional two weeks, as well as introducing another three month freebie offer for new customers.

While there has been little reaction at the time of writing, the move is hardly going to be welcomed by competitors, who have questioned the legitimacy of the length of the deal, and whether there is preferential treatment of the newcomer. Following the decision to extend the freebie offer in December, the market old-timers raised objections, arguing the extension was contrary to competition laws, though these objections have been shot down by the Telecom Regulatory Authority of India (TRAI).

The objection here is built around the idea that business cannot intentionally run continuous loss making promotions, as it would unfairly impact competition and sustainability in the market long-term. Should one be sceptical, one could argue Jio’s ‘promotional’ offer is primarily driven with the ambition of harming competitors as opposed to enhanced its own position. Though this does not seem to be the opinion of TRAI, which seems to view Jio as the golden child who can do no wrong, as it continues to apparently green-light extensions for the ‘promotional’ freebies.

The ‘new’ ‘promotion’ offers an additional three months of free services on the 303 tariff, or one which a higher value, assuming customers have signed up to the service prior to 15th April. Although customers are technically paying for services, the teams offer of a ‘complimentary’ three months at the beginning of the contract is making this one of the longest running ‘promotions’ in the mobile industry.

“Jio also announced the Jio Summer Surprise for its Jio Prime members,” the company said in a statement. “Every Jio Prime member, when they make their first paid recharge prior to 15th April using Jio’s Rs 303 plan (or any higher value plan), will get services for the initial 3 months on a complimentary basis.

“The paid tariff plan will be applied only in July, after the expiry of the complimentary service. The Jio Summer Surprise is the first of many surprises for Jio Prime members.”

The objections to the ‘promotion’ have not been raised by the likes of Vodafone India, Idea or Bharti Airtel yet, but there should be some action over the next couple of days. Execs at the market incumbents must be wondering what Reliance Jio has to do before TRAI says enough is enough. The regulator does appear to have a soft-spot for the market disruptor.

Jio’s competitors have been resilient in the face of the disruption, though the strain does appear to be taking hold. Profits have been declining slightly over the last couple of quarters, though this could start to accelerate as the reality of Jio’s ability to convert 72 million customers takes hold. The promise of additional ‘promotions’ across the summer from Jio will also have execs reaching for the paracetamol; a couple more million customers moving across to Jio would be a fair bet.

As TRAI’s golden child continues to make waves across India, one questions stands out above all others; will there ever be an end to Jio’s ‘promotional offer’?


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