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Aggressive tariffs, Rs 500 4G feature phone: Jio's game plan for disruption

The feature phone is speculated to cost Rs 500 after the company subsidies

Sunainaa Chadha & Khalid Anzar  |  New Delhi 

Reliance Jio to announce new tariff plans, feature phone on July 21

Infocomm is likely to unveil new tariff plans as well as a Rs 500 with capabilities at the Reliance Industries’ annual general meeting on July 21 as its 84-day — announced on April 11 — is ending soon. 

Under ‘Dhan Dhana Dhan offer’, the company offered a 3-month long subscription for data, Voice over Long Term Evolution (VoLTE), SMS and a suite of app on monthly recharge of Rs 309 and above. However,  despite various offers and schemes to lure telecom users, Jio's net additions for  are seeing a declining trend, which is why it needs to push out its low-cost feature phones and grow its base. 

"Jio is likely to price its “at a paltry Rs 500 (sub-$8) to lure 2G subscribers to directly switch to 4G”, which implies “Jio subsidising each handset by as much as $10-15 (Rs 650-975)”, Rajiv Sharma, HSBC director and telecoms analyst, said in a note, viewed by Business Standard. 

Sharma further states that given Jio’s aspiration to own 50% of the market, it is a matter of time before it launches low-cost feature phones in an attempt to expand market as competition is still catching up on coverage and yet to deploy voice over LTE.

Little wonder that Jio appears to be ready to flood the market with its devices, having placed orders for 18-20 million of the feature phones with some key Chinese original device manufacturers (ODMs).

The combined with ultra-affordable tariff would not only allow Infocomm to lure 2G subscribers to move to but also strengthen its rural subscriber base. HSBC's Sharma expects the launch of Jio’s mass-market “to happen any time from now” if the company is targeting urban low-end customers. 

Hence Jio is likely to disrupt the telecom market once again with a combination of an aggressive tariff offer backed with the mass-market as its rivals and are still running trials on but haven’t launched commercially. 

While, has again emerged as the fastest mobile service provider with an average download speed of 18.8 megabit per second (mbps) in June. However, of its 72.16 million subscribers by end-December 2016, only 4.12 mn or 5.72 per cent were from rural areas, in contrast to incumbent operators. 

Rationale behind timing and pricing of phone:

According to Sharma,  Jio may price its anywhere between Rs 500 and Rs 800 in order to get the new 2G subscibers on board. However, this pricing implies subsidies of around $10-15 per handset.

2G phones are available in a price range of Rs 575-600; feature phones may be priced around these levels

Mobile phones Peace P1  Citel C1  UNI N21  Rocktel W7  Micromax X090  Adcom IKON 4  Spice Xlife 431Q  Lava A32 
Memory Card Up to 8 GB Up to 8 GB Up to 8 GB Up to 8 GB Up to 8 GB Up to 32 GB Up to 32 GB Up to 32 GB
Primary Camera  No No 0.3 MP 0.3 MP 0.08 MP 5 MP 5 MP 2 MP
2G Yes Yes Yes Yes Yes Yes Yes Yes
3G No No No No Yes Yes Yes Yes
SIM  Dual Dual Dual Dual Dual Dual Dual Dual
OS  NA NA NA NA NA Android 5.1 Android 4.4 Android 4.4.2
WiFi  No No No No Yes Yes Yes Yes
Radio  Yes Yes No No Yes No Yes Yes
GPS  No No No No Yes Yes Yes No
Price (Rs)  575 599 599 599 1,073 2,333 2,599 2,680
Source: HSBC Report (Data source:

What about timing? 

If Jio is targeting the urban low-end users, it could launch the phone any time now, but if it is targeting the rural market, it could be a couple of months from now, notes Sharma. 

"Rural markets are linked to farming and thus have seasonal cash-flows with their cash collection months being October and February when they harvest and sell their produce in the market. We argue launch is likely in September/October as it is a cash collection month for farmers as well as being a festive season across India"

Impact on rivals like Bharti and Vodafone
Low-cost by Jio may imply that incumbents possibly have to vacate existing 3G and 2G spectrum for Moreover, telcos may have to accelerate their capex, coverage and capacity for as Jio will attempt to make the leading technology for the market  and significantly boost consumption of online videos.

First Published: Wed, July 05 2017. 10:40 IST