1. Jio Phone: Two key reasons why Reliance 4G feature phone may not be a big hit

Jio Phone: Two key reasons why Reliance 4G feature phone may not be a big hit

Despite offers like life-long free voice calls bundled with 4G data streaming and effective price of zero, analysts feel that Jio Phone may not be able to fully tap into the feature phone segments.

By: | Published: July 24, 2017 5:47 PM
jio phone, reliance jio, Reliance Industries Limited, reliance jio 4g feature phone, Reliance AGM, average revenue per user, jio booking Undoubtedly, Jio Phone became talk of the town as soon as it was launched by India’s wealthiest man and Reliance Industries Limited (RIL) chief Mukesh Ambani on Friday.

Undoubtedly, Jio Phone became talk of the town as soon as it was launched by India’s wealthiest man and Reliance Industries Limited (RIL) chief Mukesh Ambani on Friday. Ambani termed it as an intelligent phone. Despite offers like life-long free voice calls bundled with 4G data streaming and effective price of zero, analysts feel that Jio Phone may not be able to fully tap into the feature phone segments. According to a report in DNA, analysts have expressed concern saying that Jio Phone may not be a big hit. The analysts have given two key reasons for this – 1. High initial payment of Rs 1500 and 2. Lock-in period of three years. According to an article in DNA citing HSBC Global Research note, the combined cash outlay of Rs 1650 (1500 for phone and 153 for recharge) may not cater to the entire 500 million market and may address only 25-30% because the average selling price in the feature phone segment is Rs 700.

Ambani, launching the phone had said, that the phone, which was targeted at 50 crore feature phone users in the country, will be available on payment of a refundable security deposit of Rs 1,500. This deposit will be refunded after 36 months on return of the phone, he said, adding that the price of the phone will effectively be zero.

Notably, subscribers with 2G handsets and 3G feature phones account for 40-45 pct of revenues for the incumbents players, reports DNA. Also, the report in the newspaper adds that average revenue per user (ARPU) ranges from Rs 50-100.

However, Reliance Jio has said that it will provide unlimited data on the phone for Rs 153 per month.

“JioPhone will make the 2G feature phone obsolete,” Ambani had claimed at Reliance AGM, adding that the company is looking to bring 5 million phones to the market a week. The JioPhone will be available for user testing in beta mode from August 15 and for pre-booking from August 24.

  1. Ashok Kumar
    Jul 24, 2017 at 6:19 pm
    The condition of refundable security of Rs 1500 after the feature phone is refundable after three years is tricky and not digestible by common man. This snag all that will affect Jio's high hopes. Their enthusiasm is misplaced.
    Reply

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