Indian operator Reliance Jio’s net loss widened sharply in its fiscal second half 2017 (the period ending 31 March) as back-to-back promotional offers left the new entrant with virtually no revenue.

Jio’s net loss for the October to March period increased to INR225 million ($3.48 million) from INR74.6 million the previous year, while its revenue plunged to INR5.4 million from INR22.5 million in H2 FY2016, it said in a stock market filing.

The sharp drop in revenue isn’t a surprise as Jio, which launched nationwide 4G service in early September, introduced generous free voice and data plans until the end of 2016 to attract customers. In December it extended those offers until end-March.

Jio’s net loss for its full fiscal 2017 widened to INR313.7 million from INR157 million in fiscal 2016, while revenue for the year dropped to INR12.2 million from INR31.5 million in FY16, Business Standard reported.

Mukesh Ambani, chairman of Jio’s parent company Reliance Industries, announced in late February it would start charging for data on 1 April after its extended free offers expired, but introduced a special discount programme for existing customers. In mid-April it rolled out new low-cost unlimited data plans after the telecoms regulator advised it to drop its latest three-month complimentary offer to subscribers enrolling in its Prime membership programme.

The operator said 72 million of its 109 million customers signed up to Prime by end-March.

Jio’s capex in January-March was INR180 billion and is expected to remain at about the same level in the first quarter of its 2018 fiscal year. It has deployed more than 100,000 mobile towers and plans to double the number by end-2017.

The company said it is making progress in rolling out a FTTH business offering, with beta trials underway in a few locations and plans to expand the scope of the trials in the next few months.

Spurring competition
To compete with Jio the country’s leading mobile players have been forced to cut tariffs and expand data allotments, which have taken their toll on the incumbents’ profitability.

In January market leader Bharti Airtel reported a sharp drop in profit for its fiscal Q3 (calendar Q4 2016) as lower data and voice tariffs in its domestic market pulled down its turnover for the first time since 2002. Idea Cellular reported its first ever quarterly net loss for its fiscal Q3 (also calendar Q4). To hold onto its existing mobile subscribers, Idea said it was forced to reduce voice rates by 10.6 per cent and cut its mobile data rates by 15.2 per cent.