Reliance Jio Phone effect: Idea cellular set to make affordable 4G phones

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Published: July 28, 2017 6:35:21 PM

After Reliance Jio launched the anticipated Jio Phone, Idea Cellular has said that it is aiming to make phones affordable.

Idea Cellular is said to be working with phone vendors to make phones affordable. (Reuters)

After Reliance Jio launched the anticipated Jio Phone, Idea Cellular has said that it is aiming to make phones affordable. The network provider is working with phone vendors to make phones affordable, according to a Reuters report. An Idea executive told the news agency that the company does not intend to subsidise handsets, instead, they are working towards making phone affordable. Idea said that it is hoping to launch VoLTE (a 4G network) services in the early half of the year 2018. Reliance Jio announced that the JioPhone, an effectively free 4G feature phone in August this year. Ever since the announcement, analysts have claimed that rivals like Idea, Vodafone and Airtel, have no choice but to tie up with phone manufacturers and work on similar handsets.

Meanwhile, Idea has said that it is hopeful of government participation to de-stress the telecom sector. The company said that it is trying to optimise costs to make up for loss of revenue and added that the consolidation of the market and higher data usage will lead to revenue recovery. Meanwhile, shares of Idea Cellular fell today hit by the price war wrought by new entrant Reliance Jio. It also posted a third straight quarterly loss, Reuters reported. Yesterday, it posted a first quarter loss of Rs 816 crore. The decline in revenue was similar in magnitude to what was seen with Bharti Airtel, both a result of reacting to Jio’s aggressive offers, Bernstein analysts wrote.

Also read | Vodafone announces new 4G plan: What are Reliance Jio, Airtel, and Idea giving you in terms of tariff plans and offers

Last week, Jio launched its much-awaited 4G feature phone, which it will give free to subscribers, albeit with a Rs 1,500 security for three years. The company has also launched a monthly Rs 153 plan with free local and STD calls as well as 500 MB data every day.

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Reliance Jio has shaken India’s telecoms industry since it was launched last year by offering months of free services and sharply discounted plans, battering the fortunes of established rivals. Idea Cellular had posted a profit of Rs 217.1 crore in the same period a year ago, a PTI report said. But it has not been able to recover from the pressure of aggressive tariff war triggered by Mukesh Ambani-led Reliance Jio Infocomm.

Also read | Reliance Jio phone set to launch, but Bharti Airtel shies off launching its 4G feature phone

Interestingly, even Bharti Airtel, the country’s largest telecom operator, said that it will not follow the new entrant Reliance Jio by launching a VoLTE-enabled feature phone, but believes that such developments will help customers consolidate their spending on one SIM. However, to counter Jio, the company will ‘aggressively’ come out with more offers to ring fence its subscribers and grow market share.

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