Jio beats incumbents in ARPU race: Study

NEW DELHI: Reliance Jio’s average revenue per user (ARPU) grew to $4.70 or Rs300 after the Mumbai-based telco ended freebies in March, according to a study by Kleiner Perkins Caufield & Byers.

The firm said India’s top three incumbent telcos—Bharti Airtel, Vodafone India and Idea Cellular—together had an average ARPU of $2.8-3 (about Rs195) in 2015-16, which included voice, data and value-added services. Kleiner Perkins is a San Francisco-based venture capital firm. The report was prepared by Mary Meeker, a US-based venture capitalist.

According to the study, billionaire Mukesh Ambani-owned Jio converted nearly 67% or 72 million of the total 108 million signups to a paid Prime platform till March 31 this year. India’s telecom sector saw high competition from Q4 of 2016 to Q1 of 2017 after Jio launched freebie-laden commercial services in September last year.

The country’s top three telecom service providers, who together account for 60% of the broadband subscribers, were forced to cut data and voice tariffs over the next two quarters to stem loss of customers to Jio. In March this year, the average cost of 1GB of data for the incumbents worked out to a little less than $2, compared with $0.33 for Jio, according to the Kleiner Perkins report.

In the second quarter of 2016, the voice revenue of Indian carriers had declined by 4% from the previous quarter, while data cost per gigabyte (GB) had fallen from $3.50 to less than $3.15, according to the report.

After Jio’s entry until the end of 2016-17, the revenues of Sunil Mittal-driven Bharti Airtel, Aditya Birla group’s Idea Cellular and UK-based Vodafone’s Indian arm dropped substantially.