Reliance Jio could earn ?21,300 crore this fiscal: Moody's
Reliance Jio will be able to generate revenue of about ?21,300 crore for the current financial year, assuming its 7.2 crore Prime users pay for services between July 2017 and March 2018, ratings agency Moody's said. Further, Jio's paid customers are "credit positive" for Reliance Industries, it noted. Jio's aggressive stance will ensure heightened competition in the sector, it added.
New Delhi, Apr 5 (PTI) Newcomer Jios 72 million paid customers are "credit positive" for parent Reliance Industries as subscriber enrolment reduces cash flow uncertainty of the telecom business, Moodys Investors Service said today. Moodys calculation shows that Jio will be able to generate revenue of about Rs 213 billion (Rs 21,300 crore) for the current financial year, assuming all 72 million users pay Rs 303 per 28 days between July 2017 and March 2018. On the enrolment of paid subscribers, Moodys Investors Service said, "This is credit positive as the subscriber enrolment reduces cash flow uncertainty of the telecom business, on which RIL has spent over Rs 1.7 trillion (Rs 1,70,000 crore) over the last six years." Jio, in February, said it has enrolled 100 million users for its free services that was slated to end on March 31. The company had also announced that it would start charging for services from April 1 and introduced Jio-Prime membership, a discounted set of price plans to incentivise non-paying subscribers to subscribe to paid services. It has now extended by a fortnight the deadline for enrolment to its Jio-Prime plan, and as per its last update has 72 million paid customers. Also, it has announced that all Prime members who subscribe to higher value plans (Rs 303 and above) will enjoy complimentary services for three months and that subscribers will only be charged for services from July. "... there was uncertainty about the success rate of transitioning non-paying subscribers to paid plans, but that uncertainty has now reduced to a large extent," the statement by Moodys said. It further said a significant portion of the 72 million subscribers are expected to opt for Rs 303 plan, given that it is the minimum plan that gives complimentary services for three months. "However, as the price plan does not require the subscriber to commit beyond the 28 days, they are free to switch at any time after that," it said, adding that Prime membership will therefore have to continue to be competitive and maintain service quality to retain customers. The company may have to revisit its price plans beyond April 15 to attract and retain subscribers who do not sign up for the Prime offering, it noted. 