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Jio comes up with new tariffs with IUC of 1000 minutes weaved in

Each new tariffs will come with 1000 minutes of offnet IUC minutes, which would have cost users Rs 80 if purchased separately. The plans also have data worth 56GB, 112 GB and 168 GB worth of data.

, ET Bureau|
Updated: Oct 22, 2019, 09.28 AM IST
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Reuters
Jio-
This is the second rejig telco has made In its price plan since introducing IUC of 6 paise per minute.
Reliance Jio Infocomm (Jio) has introduced a new set of tariff plans with additional interconnect user charges (IUC) weaved in, a move which, analysts say, is to ensure the telco’s customers do not migrate to rivals’ network after Mukesh Ambani-led telco started charging them for some voice calls, and also pushing some to higher plans to generate more revenue.

The new pre-paid plans are worth Rs 222, Rs 333, Rs 444 and Rs 555 and come with a validity of 28 days, 56 days and 84 days (for last two), respectively. Each of the new tariffs come with 1,000 minutes of offnet, or calls to rivals’ network, IUC minutes, which would have cost users Rs 80 if purchased separately, the company said in a statement Monday. The plans also have data worth 56GB, 112 GB and 168 GB, respectively.

This is the second rejig that the telco has made in its price plans since introducing IUC of 6 paise per minute for offnet voice calls to recover what the telco pays its rivals, last week. The move had to an immediate backlash from subscribers on social media, with many calling out the telco for going back on its promise of lifetime free voice calls.

ET reported in its Monday’s edition that the operator removed Rs 19 and Rs 52 price plan to make the tariff charts start from Rs 98 for its prepaid subscribers.

“It looks like 6 paisa/minute charging doesn't seem to have gone well with customers…Notably, incumbents despite financial pressure have stayed away from reacting to Jio's plan,” said Himanshu Shah of brokerage firm Dolat Capital, indicating that some of Jio’s over 350 million subscribers could be vulnerable to poaching attempts by rivals Bharti Airtel and Vodafone Idea. Both the older telcos had launched a social media campaign in a bid to attract disgruntled Jio users.

IUC, a charge paid by the call-originating telco to the destination operator, is at the heart of the latest spat between Jio and older incumbents Bharti Airtel and Vodafone Idea over the regulator’s move to seek views on deferring a zero-IUC regime, which was slated to take effect from January 2020. Jio wants the charge to go, which will help to lower its IUC payouts, while the older operators want it to stay, since they are net revenue gainers from IUC.

The termination charge, or IUC, that Jio pays however though has been falling. In the September quarter, it fell 23% to Rs 655 crore from the preceding one, building on a similar drop in the April-June period, as more calls started terminating on Jio’s network as it added subscribers at a furious pace while rivals lost users.

Sector experts have also signalled that the changed tariff plans of higher denominations is good news for rivals Airtel and Vodafone Idea . Now they can offer tariffs at increased amount than having to lower them to play catch up with Jio.

“ Jio's actions directs positivity for incumbents,” said Shah of Dolat Capital.

The latest plans could also help in generating more revenue from its subscriber base. According to analysts, until now Rs 399 was the most popular plan among its customers, but now the new Rs 444 one may take the pole position, as customers may move up the tariff ladder because between the two, the latter provides more data, has IUC weaved in upto an extent and is valid for same period.

This in turn could push up the telco’s average revenue per user (ARPU), a key market indicator, which has been a sore point with Jio. In the recently announced September end results, the telco’s quarter profit rose by more than 45% from the year earlier, but sustained another ARPU drop to Rs120 from Rs122 in the previous quarter ended June, and from Rs 156 a year ago.

Also Read

Voda Idea seeks deferring of zero-IUC regime

Airtel urges Trai to postpone scrapping of IUC

Jio's Mathew Oommen says IUC concept outdated

Jio levy aimed at forcing IUC to be lowered: Airtel

Vodafone Idea, Airtel reject Jio’s contention on IUC

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