The Reliance Group is one of India’s largest conglomerates, and its recently launched cellular service, Jio, is all set to create the next wave of disruption in the telecom market by releasing a highly anticipated 4G VoLTE smartphone at an unbelievably low price point.
The launch is expected to be this month, with brokerage HSBC’s director and telecoms analyst Rajiv Sharma putting the price as low as Rs. 500 ($8) to lure 2G subscribers to directly switch to 4G, which implies “Jio subsidizing each handset by as much as $10-15 (Rs. 650-975).”
Reliance Jio has made VoLTE services hotter, with the company offering services at one of the cheapest prices globally.
The shipment is expected to begin from July end or early August, with the company looking at a possible launch for August 15, India’s 70th Independence Day.
With the launch of these ridiculously priced 4G feature phones, Jio becomes the only operator which runs a 4G VoLTE network, leaving its rivals Airtel, Vodafone and Idea, who are yet to launch this feature commercially, choking on their exhaust fumes.
Jio already uses the Lyf brand to see 4G devices from Micromax and Intex for prices starting at about $50. But a 4G phone worth Rs 500 would disrupt the Indian telecom sector that has already been seeing a transformation since the launch of Jio in 2016.
Though Jio started in full swing, it had to slow down its pace of customer acquisition due to the limited number of affordable 4G handsets in the market. Now, phones supporting 4G VoLTE and priced affordably can help the new operator target millions of 2G feature phone users who have been wary of shifting to smartphones due to the affordability factor and lack of use case.
Now, Jio appears to be ready to flood the market with its 4G devices, having placed orders for 18-20 million of the 4G VoLTE feature phones with some key Chinese device manufacturers (ODMs.)
“Given Jio’s $29 billion investment so far in the telecom venture, we don’t think the new 4G entrant would have any hesitation in doing so (subsidizing),” said the HSBC note. Sharma expects the launch of Jio’s mass-market 4G feature phone “to happen any time from now” if the company is targeting urban low-end customers.
Jio’s current Dhan Dhana Dhan voice and data offer ends in a few days, but telecom observers say the company’s 112.55 million subscribers (as of April 2017) is going to continue to see aggressive customer acquisition with equally aggressive tariff plans.
ET had previously reported that Jio is likely to subsidies part of the selling price to make the 4G VoLTE feature phones available at about Rs 1,000 (about $15) and would come bundled with unlimited voice and video calling, besides digital content.
Reliance Jio controls the biggest chunk of 4G airwaves across India.
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