Reliance Jio’s Rs 999 costing 4G phone launch will help the telecom major grab market share among new feature phone sales, including expanding its subscriber base in the 2G segment, said Citi Research in a report.
“After Jio’s renewed attempts in Mar’23 at making inroads in the high-end postpaid and prepaid 4G and 5G segments by introducing new tariff plans, it has now embarked upon a plan to target India’s 250m low-end 2G market,” the report said. Jio on Monday launched a 4G-enabled phone ‘Jio Bharat’ at only Rs 999 per unit, the lowest entry price for an internet-enabled mobile phone.
A recharge of Rs 123 per month will provide users with unlimited voice calls and 14 GB data, compared to other operators’ Rs 179 plan for voice calls and only 2 GB data.
India still has an estimated 250 million mobile subscribers trapped in the 2G era with feature phones.
Jio Bharat is being launched with the objective of empowering every Indian with the power of digital services, especially those who cannot afford a smartphone, Jio said in a release.
Beta trial for the first 1 million Jio Bharat phones will begin on July 7, 2023. The phone comes with inbuilt apps such as JioSaavn and Jio Cinema.
It also offers UPI through Jio Pay.
“Jio’s increased focus on grabbing new subscribers could also be perceived as further reducing the likelihood of any near-term tariff hike,” the Citi report said.
According to Citi, the new phone’s specifications (like screen size, apps, etc.) are inferior to the JioPhone that was launched in 2017. However, the key attractiveness is likely to be the monthly plan of Rs 123 that offers unlimited voice.
“However, given the phone’s Rs 999 upfront price tag, it may initially appeal only to those looking to buy a new feature phone and may not immediately disrupt Bharti and Voda Idea’s 2G base. Unlike Bharti’s clear premiumisation strategy, Jio also remains focused on further expanding its subscriber base.”
“Additionally, this development could arguably signal reduced probability of a tariff hike in the near term,” the Citi report added.