After Billions In Capital, India’s Reliance Jio Tackles Drop In Active Users

Startup unicorn Reliance Jio, India’s largest mobile operator, is confronting the harsh reality of active users falling off despite a growing number of total subscribers, according to a Financial Times report on Thursday (Oct. 8).

Chairman of Reliance Industries and owner of Reliance Jio Mukesh Ambani — Asia’s wealthiest man — has grown the mobile customer base to 397 million people and has attracted Big Tech backers like Google and Facebook among its 13 international investors.

June numbers reflect a three-year low of active users — 78 percent, down from 84 percent a year earlier, according to data from the Telecom Regulatory Authority of India (TRAI). Active users are defined as the highest number of subscribers connected during a given month.

That means that at the time TRAI measured results four months ago, Reliance Jio totaled 87 million inactive users, according to FT. Comparatively, 98 percent of the users at competitor Airtel were inactive during the same time frame. In addition, inactive users at competitor Vodafone Idea hit 90 percent.

TRAI compares registered SIM cards to those that are merely connected to the network. How those numbers are reported varies from one company to the next. But regardless of the disparity in how numbers are reported to investors, the falling share of active Jio users has drawn attention.

“The sheer magnitude of this absolute gap is startling,” analysts at Kotak Institutional Equities told FT. “We are unable to comprehend why [Reliance] Jio’s subscriber base would exhibit much different behavior” when compared with Airtel.

Reliance said that questions asked by the Financial Times about the disparity showed the news outlet had a “limited understanding of concepts or malicious intent to create controversy.”

“There are various reasons that a customer, especially data customers, may not be active on the network at a given point of time,” Reliance said.

The company added, “Jio reports a consistent number of customers across all reporting formats unlike some of the other operators.”

Ambani has set his sights on Jio becoming the country’s first tech giant and envisions selling everything from eCommerce to FinTech. He aims to have 500 million new users by 2023.

The Abu Dhabi Investment Authority (ADIA) invested $750 million for a 1.2 percent stake into Reliance Retail, another Reliance subsidiary.