The company will target the roughly 20% of Indian mobile subscribers still using 2G feature phones
This week, Reliance Industries, parent company of Indian mobile operator Reliance Jio, has announced the launch of a 4G-enabled phone costing just Rs 999 ($12).
The new 4G phone, named Jio Bharat, runs on Reliance Jio’s proprietary operating system and comes with a suite of home-grown applications, including the video streaming app JioCinema, music app JioSaavn, and mobile finance app JioPay.
Jio says Jio Bharat is the cheapest 4G-enabled phone in the country, a fact which they hope will entice some of the roughly 250 million Indian customers currently only capable of using 2G connectivity to make the purchase.
“There are still 250mn mobile phone users in India who remain ‘trapped’ in the 2G era, unable to tap into basic features of the internet at a time when the world stands at the cusp of a 5G revolution,” said Reliance Jio chair Mukesh Ambani.
“Six years ago, when Jio was launched, we made it clear that Jio will leave no stone unturned to democratize internet and pass the benefits of technology to every Indian. Technology will no longer remain a privilege for a select few,” he added.
Jio’s initial beta trial is the sale of one million devices – no small feat, but still only a tiny dent in market that contains nearly 1.5 billion people. Nonetheless, if successful, the move could further consolidate Jio’s position as the frontrunner of the Indian mobile market and pile pressure onto its rivals, particularly the struggling Vodafone Idea (Vi).
Some analysts suggest that the introduction of the new phone model with its accompanying cheap data plans could represent a significant threat the competitiveness of Jio’s rival Bharti Airtel, which has been vying for the country’s top spot for over a year now.
“We believe with this phone Jio can take market share at the lower end of the market. This also puts Bharti at risk as it can see increased churn from its recent 2G price action of increasing the Rs 99 plan to Rs 155 plan,” said JP Morgan in a note. “We believe this is negative for Bharti as any hopes of a tariff hike should be diluted over the next 12–18 months.”
Others, however, say Airtel could be less concerned. Brokerage firm BNP Paribas argues that the customers Jio is targeting with this new phone already had a chance to jump to Jio’s now discontinued smartphone, Jio Phone, in previous years and refused to do so. Airtel argues that Jio Phone had numerous additional features and advantages compared Jio Bharat, and could even be attained for a cheaper price, but this was not enough to lure customers away.
The exact impact of Jio Bharat’s launch remains to be seen but, given Jio’s intense track record when it comes to aggressive marketing strategies, this latest entrance into the mobile phone market has every reason to turn heads.
Will the launch of Jio Bharat help Jio to extend its subscriber lead over its rivals? Join the operators in discussion around market disruption at this year’s Total Telecom Congress