85% of current Reliance Jio users won't abandon network once it goes paid: BoA-ML
Reliance Jio (RJio) may have attracted millions to its network by offering free services but Bank of America-Merrill Lynch expects 85% of these staying back after March 31, 2017 once the company starts charging for services.
Reliance Jio (RJio) has seen a surge in users with its 'Welcome Offer' and the 'Happy New Year Offer' which continues till the end of March 2017. These offers give Jio users access to 4G data for free.
Industry experts believe that the real test for RJio will come after these offers come to an end. However, majority of users are be expected to continue using RJio once the free offers end.
Close to 85% of the current RJio users suggest that they will retain RJio connections once the free offer ends, according to Bank of America-Merrill Lynch (BoA-ML) survey.
Besides, the survey revealed that close to 48% users intend to use it as a second connection.
Only 18% intend to use it as a primary connection, while 67% said they will use Jio as secondary SIM/dongle when Jio's free offer ends.
A reason for this is that many find RJio's internet speeds faster than other telecom operators.
Around 55% of the surveyed users found RJio speeds faster. 32% users indicated that they use RJio as it is faster and 28% use as it is cheaper in comparison to other networks.
Among these users, 57% said that they will go for Jio's Rs 400- Rs 500 package' rather than the cheapest one.
The report said that this shows that people in India prefer value and not price.
“If this survey is indicative and Jio is able to ramp up revenue, then the current RIL valuation may prove too conservative. The imminent completion of close $18 billion of Petchem projects should lift EBITDA,” said BoA-ML.
The survey by BoA-ML was conducted with 1,000 users in December 2016 to understand how consumer behavior changes on telco services post Jio gaining reasonable traction and post demonetization. 99% of customers surveyed used a smartphone and 78% of users have monthly bills of over Rs 250.