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Satisfaction of 4G Users High, Jio to Trigger More Tariff Cuts: Survey

Satisfaction of 4G Users High, Jio to Trigger More Tariff Cuts: Survey

By Indo-Asian News Service | Updated: 5 January 2017 18:31 IST

Even as satisfaction levels of the subscribers of 4G services in India have risen to 97 percent in three months, more tariff cuts are on the anvil with retention level for Jio seen at a high 65 percent when its free offer draws to a close, says a survey.

Conducted by Bank of America Merrill Lynch on September 2016 and again three months later, the survey finds 96 percent of the customers satisfied on voice quality and 66 percent on data speeds. But high cost and slow speeds remain the biggest issues for incumbents.

"Our survey indicates that Jio's free service is gaining reasonable traction with 26 percent using Jio as primary SIM and 21 percent as secondary SIM. Some 55 percent of the surveyed users find Jio speed higher than that of other telcos," it says.

"Some 67 percent said they will use Reliance Jio as secondary SIM/dongle and 18 percent will use as primary one when Jio's free offer ends. Amongst these, 57 percent said that they will go for Jio's Rs. 400-500 package, rather than the cheapest one."

On the flip side, it says: "Voice calling is still an issue with only 22 percent having no problems at all. Some 32 percent users indicated that they use Jio as it is faster and 28 percent as it is cheap."

On tariffs and other issues, Bank of America Merrill Lynch has the following points to make:

- While customer satisfaction is high for incumbents, 28 percent users still find their services expensive.

- In our view, only Bharti is trying to create a perception through marketing gimmicks/new packages that its tariffs are at par/cheaper than Jio.

- In our view, other telcos will follow-up leading to higher competitive intensity.

- We find Bharti Infratel well placed to benefit if telcos spend more on improving their coverage with most consumers using Jio as it is faster.

- We find smaller telcos like Reliance Comm the most vulnerable as majority of the users with them are secondary SIM consumers and may likely to shift to Jio as their secondary SIM.

Bank of America Merrill Lynch said it commissioned Survey Monkey to conduct the online survey of 1,000-plus respondents across the country with 500-plus Jio users. The sample had a 47-53 female-male mix, with 78 percent of the respondents below the age of 44.

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