You may get part refund for Jio 4G phone before 3 years. Here's why

Reliance Jio may soon announce a scheme offering buyers of its 4G phone the choice to return the handset before the specified time period of three years and in return get a partly refund. The terms for the scheme could be announced in next few days, according to a Economic Times report.

The pre-bookings for the phone will start on August 24.

The phone was introduced as "India ka Smartphone" and launched at an "effective price" of Rs 0. The catch was that buyers would have to shell out a refundable, upfront deposit of Rs. 1,500 for the device (which is refundable after three years).

However, the phone may fail to match up to Jio's expectation, if some reports are to be believed.

JP Morgan, in a report, said that in India where there is the prevalence of multi-SIM phones and the pre-paid monthly churn stands at around 5 per cent, it may be unrealistic to expect consumers to embrace single-SIM phones and get locked in for three years with them. "In all likelihood, if the consumer can afford to pay at least Rs 153/month for three years, she is quite likely a smartphone user well before this three-year period runs out," JP Morgan said in a report.

The report said a lot depends on the phone and its perceived smartness. However, what makes down trading even more challenging is the three-year lock-in imposed by JipPhone. "How willing would a sub-Rs 200 ARPU (non-smartphone) subscriber be to stay anchored to a 4G feature phone and not gravitate towards a smartphone," it wonders, adding three years seems a long time to expect a subscriber to commit.

4 reasons why 'free' JioPhone may not attract buyers
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Also as the JioPhone comes preloaded with Reliance Jio apps, it is not known to what extent the device support embraces open and popular apps like WhatsApp and Paytm etc. There is also the matter of whether packing a phone with pre-loaded proprietary apps and closing off other popular free apps constitutes a violation of net neutrality, an issue the incumbents have raised in investor calls.

Brokerage JM FinancialBSE 1.71 % said Indian mobile phone users have historically been lukewarm to the idea of getting their handsets locked to one service provider and, therefore, Jio may have to offer free service initially – maybe for the initial three-six months - to incentivise existing 2G feature phone users into buying the new device. 

In its report post a Reliance IndustriesBSE -1.27 % analyst call, Bank of America Merrill Lynch said the refund of Rs 1,500 on the phone will be lower if the phone is returned prematurely. “Jio may have options for upgrades of handsets,” it said. 

Brokerage Kotak said Jio’s refund policy should answer questions like – what if the phone breaks down in the interim? Is there a minimum recharge compulsory for the refund? Should the handset be in working condition at end of three years? What is the definition of ‘working condition’?’

However, the company is not deterred by what the analysts have to say. In fact, Jio is aiming to deliver around 5 million JioPhones every week.

JioPhone was made available for beta testing from August 15, although the actual bookings will commence from August 24.

How to pre-book JioPhone

To pre-book JioPhone, users can register their interest on the Jio website by clicking on the "Keep me posted" link. Other than the "Keep me posted" link, users can also register for it by SMS. A Reliance Jio customer care executive said that you can also register your interest for the JioPhone through SMS. To register your interest you have to type "JP<>your area PIN code<>Jio Store code near your locality" and send it to 7021170211. Users can get the store code by visiting the nearest Jio store.