Jio looking to push Jio Bharat phone sales
Reliance Jio is focusing on expanding its consumer base by pushing sales of the Jio Bharat phone, veering away from paying high incentives to encourage mobile number portability (MNP), as the telecom market leader looks to moderate sales and marketing costs, industry executives and experts said.
The telco saw sales and general administration costs sharply increase over the past few quarters — to ₹540 crore in the quarter ended June 30, 2023, from ₹310 crore in the fourth quarter of FY22, indicating a jump of 74% over six quarters. «Jio is evidently looking to expand the subscriber base, but it is now focusing on capturing the feature-phone market by migrating users to the Jio Bharat phone, rather than encourage MNP since that was resulting in a lot of negative landing,» an executive with knowledge of the situation said.
Telcos give their distributors incentives for enabling port-ins from rival networks.
A report by brokerage IIFL in May indicated that in some markets, Jio had started reducing the MNP pay-outs to channel partners.
«In some micro-markets where Jio is strong, we were told that the latter's pay-out of around ₹210 per port-in is around 15% lower than peers,» IIFL said in its report.
Starting from the first quarter of FY23, Jio started seeing a significant sequential jump in SG&A expenses, and it was only in the June quarter of FY24 that the telco's spending on this metric has moderated, though it continues to grow sequentially. «With MNP-led acquisition, telcos end up getting customers for a short period.
The minute these users get a better deal, they port out to another network, leading to rotational churn,» an industry executive said. With the Jio Bharat phone, Jio hopes to capture more long-term customers
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