JioPhone Next launch: Jefferies sees 10% revenue upside for Jio

Reliance Jio’s low cost smartphone, which is due for launch this Friday, could potentially impact Bharti Airtel’s revenue by 2-3 per cent in FY 2023, brokerage Jefferies said in its report on Tuesday.

The 4G-enabled smartphone, known as JioPhone Next, has been developed in partnership with Google and will be priced below Rs 5,000.  India has around 300 million customers using 2G services and Jio’s new smartphone is targeted to win over these customers.

Jefferies estimates an addressable market of 540 million consumers for JioPhone Next and upto 10 per cent revenue upside for Jio in FY 2023. Jio’s existing tariff for smartphones is 12-72 per cent higher than that of feature phones. Upgrades by 115 million JioPhone users could boost its revenue by upto 10 per cent assuming no change in currentmtariffs, it said.

While Airtel’s data subscriber base is around 193 million, around 25 per cent of those are using a device costing less than $ 100. Jefferies estimates that Airtel’s revenue could be hit by 2-3 per cent if 12 million of these users churn out due to aggressive bundling offers from Jio.

India’s smartphone user base is expected to expand from 435 million in FY 2021 to 668 million by March 2024 driven by pick up in smartphone migration, CLSA said in its recent report. “While Q1 FY 22 shipments were hindered by a second wave of pandemic and state lockdowns, Q2 FY22 shipments may be lifted by Reliance Jio’s smartphone,” it added.