Airtel is trying to ace Jio’s strategy in a bid to win back customers
2016 was a monumental year in India’s telecom industry. For more than a decade, the market was ruled by Airtel, Vodafone, Idea, and a few other regional operators. Conventionally, a majority of their revenues came from billed calls, data, and even SMS. These operators were focused on providing just one thing, access to communication.
Then came in Reliance’s Jio and the complete industry was revolutionized. Backed with the latest 4G LTE infrastructure and no legacy technology, the new player was able to offer calls and SMS for free and even data was free for almost six months. Their plans were and still are ridiculously cheap. While everyone was offering 1GB of bandwidth per month for INR 299, Jio was offering 1GB of data per day for 28 days for an even lower rate.
The outlook on services being offered was different for Jio and incumbent players. Jio recognized that users will use more bandwidth when they have an option to spend it on. This is where the complete Jio suite of apps like Jio Music, Jio TV, Jio Cinema came very handy. The operator was offering more than just data, and users were hooked onto it.
Now, Airtel is trying to ace the same strategy. Initially, they tried to focus on subscriber number to churn out profits. Now, it’s planning to improve the ARPU (Average Revenue Per User) by offering better services and targeting users with a higher ability to pay.
Secondly, they are ramping up investment in data-hungry services like Wynk Music. Airtel has also launched the “Airtel Thanks” program that partners with premium content brands such as Amazon Prime, Netflix and Zee 5 to name a few. Customers are now classified into three tiers — silver, gold, and platinum.
Silver tier would entitle consumers to the world of basic content, which includes access to Airtel TV and Wynk. Those in Gold tier will get access to many add on telecom benefits, and access on premium content or financial services. This includes Netflix Gift worth INR 1500, Amazon Prime at No extra cost, Airtel TV premium, Wynk music, and Airtel Secure. The platinum tier will have access to VIP service from Airtel, premium content, e-books, device protection, and exclusive invites and priority access to events and sales.
Jio’s parent company Reliance is a huge conglomerate with billions in profit each quarter. They have the resources to back Jio’s expenditure for years to come. Airtel is bleeding on the other hand, and it’ll next to impossible to build a wide array of content library in-house like Jio in a short time frame. Hence, partnering with popular services makes the most sense.
Airtel’s profit dropped from INR 306 crore in the third quarter of 2017-18 to just INR 86 crore in Q3 FY19, while Vodafone-Idea incurred net losses of INR 5,000 crore in the December quarter.
The new indirect loyalty program ensures that users consume as much data as possible and continue to stick around with the network. Airtel has also successfully improved its network in terms of data speed and is currently the fastest 4G carrier in India according to OpenSignal.