Moody’s Investors Service expects a higher cash drain from Reliance Industries’ telecom subsidiary, Reliance Jio Infocomm, as the latter’s tariff plans are more aggressive than previously expected.
The global rating agency said Jio’s success hinges on increased 4G devices penetration and a dramatic change in data consumption patterns in India, especially since data usage in the country remains low.
In fact, Moody’s does not expect Jio to achieve its initial target of 100 million customers before March 2018 as it feels ringing in a change in consumer behaviour at this scale in such a short period will be a challenge.
"While we expect Jio will achieve its 100 million subscriber target by March 2018, it remains uncertain to what extent data consumption will increase, especially once consumers are asked to pay for it, " said the rating agency in its note Tuesday.
Mukesh Ambani-owned Jio, in its bid to grab a 100 million customers in the shortest span, has launched free voice and data services from September 5 as part of a welcome offer that will continue till December 31.