Aggressive tariffs, Rs 500 4G feature phone

Company News

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

Under ‘Dhan Dhana Dhan offer’, the company offered a 3-month long subscription for 4G data, Voice over Long Term Evolution (VoLTE), SMS and a suite of Reliance Jio app on monthly recharge of Rs 309 and above.

"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, reported the Economic Times.

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.

The ET report further said 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).

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.

ALSO READ: Only 5.7% of Jio users from rural areas: Trai

At the end of December, Idea had a subscriber base of 190.52 million, of which 104.35 mn were rural subscribers. Vodafone’s was 204.82 mn, of which 109.94 mn were rural subscribers. The overall base for Airtel was 269.68 mn; its rural subscribers were 130.57 mn.

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.

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