Almost 50% of the new subscriber additions on Reliance Jio’s network have come from JioPhone since July 5, when the price of the 4G feature phone was slashed from Rs 1,500 to Rs 501 by exchanging it with an old feature phone.
Though company officials declined to share the sales number of the Jio phone post the reduction in prices, trade channels indicated that between July-August, 10 million handsets have got sold. This takes the cumulative sales of the phone to around 35 million. At the company’s annual general meeting on July 5, Reliance Industries chairman Mukesh Ambani had said that since launch (October, 2017) 25 million Jio phones had got sold.
Sources said that since July when the prices of Jio phone came down to Rs 501 through a scheme called Monsoon Hungama monthly subscriber addition by Jio has increased. While earlier it used to be around 6-7 million per month, it has now touched 10-12 million a month and half of it comes through Jio phones.
Apart from reducing the price of the JioPhone the company also added popular apps – WhatsApp, YouTube and Facebook which together have a market share of around 80% — in the phone, to increase its traction amongst users.
Before the near 66% reduction in price and addition of popular apps, the phone had notched sales of around 25 million in a span of eight months, which analysts did not see as too high. The reason cited was that it addressed only 20% of the feature phone market as the entry level price Rs 1,500 (refundable security after three years) was seen as too high for this segment. “However, with the price down to Rs 510 it addresses 90% of the market,” analysts said.
Ambani has targeted 100 million users for the feature phone in the shortest possible time.
Analysts said that in the coming months Jio’s net subscriber addition is likely to surge even more because of this low-cost phone.
They are basing this on the contribution this phone made to Jio’s adjusted gross revenue during the April-June quarter, when its access services revenue at Rs 7,125.69 crore surged past Bharti Airtel’s Rs 6,723.54 crore. This was on the back of its growth in C-category circles where it is the predominant player providing 4G network as well as a cheap 4G JioPhone, something its rival incumbents have not been able to effectively counter.
C-category circles comprise Himachal Pradesh, Bihar, Odisha, Assam, North-East and Jammu and Kashmir. On a sequential basis, industry’s AGR in these circles during the quarter rose 17.2%, contributing 17% to Jio’s AGR, higher than industry contribution at 12.8%.
Quite in contrast, Jio’s AGR in metros dipped by 0.9% on a sequential basis.
Analysts maintain that Jio’s focus is still on gaining subscribers and the cheap JioPhone will aid in this exercise.