Jio surprises again with new offer, Airtel says it's old wine in new bottle

MUMBAI: Reliance Jio Infocomm unveiled a new plan for mobile phone subscribers, offering three months of freebies besides 1GB data a day for a one -time recharge of Rs 309 and above, drawing criticism from Bharti Airtel, which deemed it similar to the new entrant’s previous plan that the regulator had stopped.

Under the Jio Dhan Dhana Dhan plan available from Tuesday and valid for 84 days from the date of subscription, Jio will offer free voice, unlimited SMS and access to Jio apps, and 1 or 2 GB of daily data for a one-time payment of Rs 309 or Rs 509, respectively, to its Prime members, who paid a onetime fee of Rs 99.

Non-Prime members can pay the one-time fee and recharge with either of the two amounts to become eligible for the new offer. “Jio is currently implementing the world’s largest migration from free to paid services in such a short period of time. In order to smoothen the migration from free to paid services, Jio has implemented simple, affordable and regulatory-compliant plans in customer interest,” the company said in a statement Tuesday.


Jio said it had racked up over 100 million users and 72 million of them converted to paid users by March 31, making it the largest telco by wireless broadband subscribers. The Mukesh Ambani - owned company said that it had withdrawn its Summer Surprise offer following the advice of the Telecom Regulatory Authority of India.

Under that offer, launched on March 31, Prime members making their first recharge payment of Rs 303 or more by April 15 would get three months of complimentary services.

“We are surprised to see what Jio is doing. It violates the spirit of the Trai directive and essentially continues with a similar plan now masquerading under a different name,” an Airtel spokesperson told ET over email.

“This is a classic example of old wine in a new bottle. We hope that the authority will act against this provocative disregard of their direction.” Airtel, the market leader, said action is need because the industry’s financials are worsening.

Jio’s Summer Surprise was embroiled in controversy from day one, when most deemed it as an extension of the free plans it had already offered from September 5, when it started services, to March 31.

Trai had taken suo moto notice of the offer and asked Jio to scrap it on April 6, without setting a deadline. Airtel slammed Jio for violating Trai’s directions by continuing to offer the plan over the weekend and asked the regulator to act against the new entrant.

Vodafone India wrote to Trai on Monday complaining that Jio was violating its directions and sought action against the newcomer. The telcos want Jio to start charging for services so that they have a better chance at devising price plans to compete. They didn’t say if they would approach the authorities on Jio’s latest offer and the regulator was unavailable for comment.

Rajan Mathews, director general of the Cellular Operators’ Association of India, said Trai should decide if Reliance Jio’s latest tariff pack is similar to its Summer Surprise offer and compliant with rules.

“Jio’s latest offer will continue to put financial stress on the rest of the telecoms industry, which would automatically mean reduced revenues for the government in the coming quarters,” Rajan said, adding that continuing financial pressure would also mean telcos would struggle to pay banks and network vendors.

The Airtel spokesperson said the industry is in a very weak position and continues to bleed. “The financial impact that telcos are seeing does no good in the long term to customers. With a weakened financial position, companies will find it difficult to raise the capital to invest and roll out broadband networks,” the spokesperson said.

Brokerage Kotak Institutional Equities said Jio’s actions could potentially drag the industry size down to such low levels in the near term that “raising it to the needed-fora-reasonable-business-case levels within a reasonable time frame may be impossible.”