![](\"https:\/\/im.rediff.com\/money\/2020\/dec\/19jio-5g-01.jpg?w=670&h=900\")
<\/p>\nMukesh Ambani-led Reliance Jio has introduced a 20-per cent cashback offer on select prepaid plans, intensifying competition in the Indian telecommunications (telecom) market.<\/p>\n
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Jio is the largest telecom service provider in India, with 443 million subscribers as of July.<\/p>\n
Jio’s cashback offer will drive cross-selling across Reliance’s various retail businesses, but the move is also being seen by some analysts as a signal that tariff hikes may not be around the corner just yet.<\/p>\n
Jio did not issue a statement on its offering.<\/p>\n
A company source said Jio continues to introduce promotional offers to provide more value to its customers and the cashback offer is being promoted across all Reliance platforms as well.<\/p>\n
According to the Jio website, the 20-per cent cashback offer is available on three prepaid plans (Rs 249, Rs 555, and Rs 599).<\/p>\n
These plans come with a validity of 24-84 days and give customers 1.5 gigabyte (GB) to 2 GB data daily.<\/p>\n
While the cashback offer is being dubbed a ‘promotional scheme’ ahead of the festival season, it comes within two weeks of the telecom reforms package.<\/p>\n
Both Bharti Airtel and Vodafone Idea (Vi) renewed the call for a tariff hike, following the government’s announcement.<\/p>\n
Some analysts feel Jio’s move could put pressure on the competition and tie their hands on the issue of a tariff hike.<\/p>\n
“We believe that cashback offers will likely delay tariff hikes, which are crucial for Vi and Airtel in the near future,” said Yogesh Patil, research analyst, Reliance Securities.<\/p>\n
“While we believe the current pricing is unsustainable for the sector, we do not rule out near-term increase in competitive intensity, given Jio’s focus on market-share gains,” said Credit Suisse in an investor note.<\/p>\n
It said the offer indicates that Reliance Industries is trying to increase cross-sell amongst Reliance’s various retail businesses by offering cross-brand cashbacks and rewards.<\/p>\n
Credit Suisse added that Airtel also offers a cashback of up to Rs 100 on purchase of FASTag, which is a toll payment system.<\/p>\n
“Jio’s prepaid plans are already priced 6-17 per cent lower than Airtel’s and Vi’s.<\/p>\n
“This cashback offer makes it further attractive to customers.<\/p>\n
“We think the cashback scheme is a limited period offer.<\/p>\n
“Sentimentally, it’s a negative for competition, but do not see it having much financial impact,” said a telecom sector analyst.<\/p>\n
While both Vi and Airtel have increased tariffs of low-end 2G subscriptions, family and enterprise plans, the hikes have not been taken across the board.<\/p>\n
Vi managing director and chief executive officer Ravinder Takkar said telecom sector reforms create a right environment for price increase.<\/p>\n
“I have always said I will not be shy of increasing prices, but I need to be confident that others will follow and I will not be left out there,” Takkar had said.<\/p>\n