03/04/2017 11:23 AM IST | Updated 03/04/2017 12:44 PM IST

Jio To Address Congestion Issues So That It Can Become Users' 'First-SIM' Operator Of Choice

72 million users have signed up for the Jio Prime scheme.

Bloomberg via Getty Images

Reliance Jio's extension of its Summer Surprise Offer by another fortnight to 15 April indicates that it wants more Jio users to sign up for its Jio Prime scheme.

According to Jio, 72 million out of the original 100 million users who had signed up for its free service in 2016, have opted for the Prime membership. A user can become a Prime member by paying ₹99 and then choose from different data plans.

As part of the latest extension, a recharge amount of ₹303 or a higher amount will give users three months of benefits instead of one as promised earlier. The two important plans for Prime members are priced at ₹303 and ₹499 and offer users free calls and 1 GB and 2 GB daily data respectively.

Besides buying time to sign up more users for the Prime program, Jio's latest offer also gives it more time to iron out technical issues. According to a company survey, 67 percent users are using Jio as their secondary SIM. While the sample set used in the survey was small, fact remains that many users are hesitant to swap their primary SIMs for a Jio SIM. One major reason is congestion in the Jio network, which leads to unreliable data and voice transmission.

In a public letter issued on 31 March, Reliance Jio Chairman Mukesh Ambani promised to install 1 lakh phone towers in the coming months. Jio plans to make a greenfield investment of 200,000 crore in its operations. "We are acutely aware that we have small pockets of congestion on our network. With our investment in network expansion, you will see a dramatic improvement in service quality in the coming weeks," Ambani said in the letter.

One of telcom industry's main worries is that the new set of competitive plans being offered by telcos will further dampen their earnings. To counter Jio's plans, which were first announced in February, rival telecom companies are offering similar packages to retain their customers.

According to a report in the Economic Times, the EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation) for incumbent operators is going to drop in the coming months.

"A continuing period of complimentary services for another three months from Jio will definitely benefit consumers, but the impact on industry also must be weighed in by the government, especially in the context of issues recently raised by the Telecom Commission about declining financial health of the telecom sector," Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), said in a statement.