Leak reveals Reliance Jio feature phone in all its glory; launch imminent

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

This article first appeared on Business Standard on July 5, 2017
Reliance Jio Infocomm is likely to unveil a Rs 500 feature phone with VoLTE capabilities at the Reliance Industries’ annual general meeting on July 21. Recently, the company revised its tariff plans and launched new plans for its customers as its 84-day Dhan Dhana Dhan offer — announced on April 11 — came to an end. 

Despite various offers and schemes to lure telecom users, Jio's net additions for 4G  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 4G feature phone 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 per cent of the market, it is a matter of time before it launches low-cost 4G feature phones in an attempt to expand 4G market as competition is still catching up on 4G coverage and yet to deploy voice over LTE.

Little wonder that Jio appears to be ready to flood the market with its 4G devices, having placed orders for 18-20 million of the 4G VoLTE feature phones with some key Chinese original device manufacturers (ODMs).

Reliance Jio Feature Phone Photo: techpp.com

The feature phone combined with ultra-affordable tariff would not only allow Reliance Jio Infocomm to lure 2G subscribers to move to 4G but also strengthen its rural subscriber base. HSBC's Sharma expects the launch of Jio’s mass-market 4G feature phone “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 4G VoLTE feature phone as its rivals Bharti Airtel and Vodafone are still running trials on VoLTE but haven’t launched commercially. 

While, Reliance Jio has again emerged as the fastest 4G 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 feature phone 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; Jio 4G 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: Amazon.in)

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. 

Reliance Jio Feature Phone Photo: techpp.com

"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 4G feature phone by Jio may imply that incumbents possibly have to vacate existing 3G and 2G spectrum for 4G. Moreover, telcos may have to accelerate their capex, coverage and capacity for 4G as Jio feature phone will attempt to make 4G the leading technology for the market  and significantly boost consumption of online videos.