Reliance Jio, the telecom firm that has caught the country by storm, has started turning off the connections of those subscribers who have not recharged their mobile phones since the beginning of April.
In April, it had introduced the Summer Surprise offer, and gave around four months of validity for each recharge.
The validity of plans for those who recharged on April 15 or before has ended today, and to continue to use their services, these subscribers have to top up their accounts with new plans.
These early adopters will be faced with ‘your account balance is empty’ message when they dial a number from their Reliance Jio phone. Internet speeds too have been reduced to 2G levels for those who do not recharge.
Unlike the last time, when each 28 day recharge entitled users to enjoy their service for a period of 84 days or 112 days, this time, each such recharge will give only 56 days.
However, to satisfy those customers who find the tariff too high, Jio has also introduced a new plan priced at Rs 399. It gives unlimited calls and 1 GB of data per day for a period of 84 days.
Jio’s rivals, such as Vodafone, Idea Cellular and Bharti Airtel are also reported to be offering 84 days of services for Rs 400-450.
The company is credited with bringing about an Internet revolution in the country. It is estimated that the country’s wireless Internet traffic has gone up by 8-10 times due to the introduction of Jio’s services. The company is estimated to be carrying around 75% of the total wireless services in the country today.
OFF THE CLIFF?
However, the coming days will be crucial for the Mukesh Ambani-led company as it is the first time that it is trying to implement such a sharp increase in effective price for its customers.
The current move will test whether or not there is a market for 4G wireless data services at the scale and price at which the Mukesh Ambani firm wants to operate.
Given that many of the company’s customers were forced to buy more than one connection due to the company’s policy of allowing only up to 2GB of high-speed usage per connection per day, the shift to higher tariff plans is also likely to force many users to abandon one or more of their connections.
This could lead to a sharp decline in the company’s active subscriber base this month.
The last time the company faced a similar situation was in April, when it moved from completely free services to paid services.
However, at the last moment, the company announced the Summer Surprise recharge option that was effectively giving 1 GB of data per day and unlimited voice calls at a cost of about Rs 2.50 per day.
As a result, customers lapped up the offer and the company managed to move from free to paid services without suffering a big drop in its user base.
It is likely that if it finds that a substantial chunk of its users fail to recharge their connection this time, it could come up with yet another surprise offer.