India’s Reliance JioPhone to hit cheap handset makers
Reliance Jio Infocomm's US$ 23 crossover phone with 4G features is expected to help India's feature phone users move up the value chain
After creating a widespread disruption in India’s telecom services market with a slew of freebies on call and data charges, the country’s richest man, Mukesh Ambani, is betting big on ‘free’ internet enabled phones to win over customers who could not log on to the smartphone bandwagon. In September, his Reliance Jio Infocomm would launch JioPhone (a 4G VoLTE feature phone) for ‘free’ to its subscribers for a security deposit of Rs 1,500 (US$ 23.30), refundable after three years.
The new crossover phone is expected to affect low-end handset makers, most of them already struggling with paper-thin margins. However, at the same time it is expected to boost lower end of the market and suppliers, creating a new in-between category and getting more people online for the first time, reports Reuters.
Currently, over 60% of India’s roughly 750 million mobile phone users have feature phones – that allow only calls and basic texts, making it the country’s single largest segment. But many will soon move up the chain.
Meanwhile, the country’s largest telecom provider Bharti Airtel has said it will not follow Reliance Jio in offering handset subsidies, but will look at bundling opportunities with device makers to grow its market share, reports Economic Times. “We’ve always treated the devices market as an open-ecosystem, whereas the JioPhone is a SIM-locked device,” said Gopal Vittal, managing director (India and South Asia), Bharti Airtel.
Vittal, however, does not see JioPhone as a major threat. He felt it could propel the launch of cheaper phones in the market and that is something that they could use to expand their market share.
Vittal said Airtel is likely to launch 4G VoLTE services nationally by fiscal-end and is already conducting trials in some of its key markets.