Speed Bumps Ahead For Reliance Jio – And Perhaps (Digital) Payments?

Even the highest-flying of firms riding the waves of mobile devices and digital payments may have their speed bumps.

And to paraphrase an old saying: The devil is in the user metrics.

News came this week that the largest mobile operator in India, Reliance Jio, is seeing some headwinds in its active user base – a subset of the total user base of nearly 397 million individuals. Of that total tally, 78 percent are active users, down from 84 percent last year, as reported by the Telecom Regulatory Authority of India. The math implies that 87 million users were inactive. In the meantime, competitors such as Vodafone Idea and Airtel reportedly had active user percentages well above the 90 percent mark.

As noted by the Financial Times, when presented with questions from FT, Reliance said the publication had “limited understanding of concepts or malicious intent to create controversy.” Reliance Jio added that “there are various reasons that a customer, especially data customers, may not be active on the network at a given point of time.”

There’s another maxim for consideration: Better to be generally right than precisely wrong.

The reasons may be varied, according to reports, such as the fact that individuals may be using Jio phones/SIM cards (which in turn informs the Telecom Regulatory Authority data) as a “backup” to other devices – or could be a nod to the pandemic’s economic impact, pushing holders to cut down on data usage.

But if the active user trend is downward, it may portend at least some bumps in the road for plans to entrench payments more firmly in the Reliance ecosystem.

PYMNTS noted earlier this year that Jio was entering the Unified Payments Interface (UPI) space, a field increasingly crowded by the likes of Google Pay and Paytm, among others.

In August, the company started to roll out its payments app (Jio Pay) with support for both QR and NFC mobile payments (with the eventuality of a larger rollout, though as of yet unspecified). BGR India reported that the app was in the testing phase and had onboarded a number of banks – Axis, ICICI, HDFC, Standard Chartered and others among them.

But if the active users are not logging in as they once did – or could – then a huge surge in uptake may not be in the offing. It’s an if – and a big if – for Jio. In the meantime, Paytm President Madhur Deora told Karen Webster that demonetization, the pandemic and the continued growth of the UPI have fostered a tailwind for digital payments.

“Compared to where we were around the time of demonetization, in terms of scale, we are probably 15 times bigger than we were then,” he said. “That’s not too bad.”

On the other hand, there’s been a growing backlash in India against some of the marquee names in tech, including Amazon and the like (Amazon is letting users in India use Amazon Pay to pay credit card bills), which might spur more support for local players like Jio.

The greenfield opportunity is there, and perhaps the active user count stats in the midst of the pandemic will be but a speed bump as Jio builds out its ecosystem.