New Delhi [India], September 29 (ANI): The sudden buzz on social media about Reliance Jio offering 'cashbacks' to its customers for recharges has caused an uproar in the market fearing a fresh tariff war in the telecom industry causing both Bharti Airtel and Vodafone Idea share prices to fall by approximately 3.5 per cent on Tuesday.
According to BofA Securities' Telecom Industry update report this appears to be part of the ongoing 'Maha cashback offer' at JioMart and RIL is looking to cross-sell here.
"From Jio's perspective, we do not expect much Average Revenue Per User (ARPU) impact. For Jio's competitors, we also do not see much impact as cashback is largely used for retail," it stated.
An update report from Credit Suisse said that the branding on the page indicates that the cashback is likely to be in the form of credits or reward points redeemable across various consumer offerings of Reliance industries such as JioMart, Reliance Digital, Netmeds and Ajio.
"This could indicate that Reliance industries is trying to increase cross-sell amongst Reliance's various retail businesses by offering cross-brand cashback or rewards," it stated.
The Credit Suisse report also highlighted that 'Bharti Airtel's existing comparable plans (for recharges done on its app or website) also offer cashback of upto Rs 100 on purchase of FASTag, a mode for payment of tolls on highways.
Industry checks reveal that other telecom industry players Bharti Airtel and Vi (erstwhile Vodafone Idea) have long been offering cashback to its users under different schemes.
Reliance Retail launched 'JioMart Cash Back Program' on September 18, 2021, for all its customers. Thus, all customers of Reliance Retail - whether they are buying fresh vegetables from Reliance Fresh or a refrigerator from Reliance Digital - are eligible for this cashback program. Since Reliance Retail also sells Jio recharge packs, the offer has become applicable to such customers.
Since JioMart Cash Back Program is launched and managed by Reliance Retail, it will have no impact on Reliance Jio's tariffs or the ARPU - a key parameter tracked by both investors and analysts. (ANI)