Reliance Jio is supposedly going to debut its 4G VoLTE enabled feature phone on Friday. The telecom operator has made merry with a truckload of free and cheap data for more than 12 months, but now it is time for Mukesh Ambani and Co to start making some money.
It seems Jio has decided to focus on the entry-level consumer segment by offering them entry-level products, and what could possibly be better than a feature phone?
Reliance Jio boasts about getting over 100 million users on its network in about 170 days. But they fail to point out that data was free for more than 12 months for its users, and we Indians love anything that is free.
Things have changed ever since Jio started charging for its data, which has forced many to look at Airtel and Vodafone for network comfort (not the best idea, mind you). All things said, here’s why we feel that Jio shouldn’t look beyond feature phones to mint big money.
We Want Free Data, Again
With schemes like Jio Preview Offer, Welcome Offer, Happy New Year Offer, people were spoilt with free data by the telco, and it’s no surprises that millions jumped to its network (even though most were using it as a secondary network).
Also Read: Use Reliance Jio 4G For Data, But Don’t Lose Your Current Number
But the day Jio started charging for data, many people decided to put their money where they got good quality of service. Which is why offering the feature phone gives Jio the chance to bundle free data with its low-cost device, forcing people to come back on their network.
Lyf Smartphones Have Lost their Mojo
Till last year, Jio managed to ship its Lyf smartphones in big numbers. So much that Lyf was fifth in the shipment list among Xiaomi and Samsung until 2016. Most of that was attributed to its affordable pricing, and they bundled it with free 4G data to anyone who bought a Lyf phone.
Once you started getting free data with every mobile handset (some offering more data), demand for Lyf came down.
So, to get its mojo back, Jio needs its low-cost feature phone to fight with the competition in the market right now. Even if the phone costs Rs 1,000, it would disrupt the market once again.
Even Today Features Phones sell more than Smartphones
According to multiple research reports, even today, over 300 million features phones are being shipped into India. Compared to that, the shipment of smartphones is far less, and this is an opportunity that Jio could tap into.
Voice-over-LTE (VoLTE) capability in some networks is helping to drive a new device category called 4G feature phones (sometimes called ‘smart feature phones’). These are providing a way for current feature phone users to take advantage of low/no cost voice calls over the 4G LTE networks.IDC 2017 report
In addition to that, smartphone users could view this device as a competent back up phone, with free data bundled and still costing them a fraction of what they’d pay for a smartphone.
Good Way for Jio to Make Money
Most experts have highlighted that Jio needs to start making money, and with Jio Prime and its latest data plans, this has become evident. With the 4G VoLTE feature phone, Jio can play the smart game by bundling data with it, and asking consumers to pay for the phone but accruing money from the data consumed.
Which is why Jio is likely to price its phone between Rs 1,000 to Rs 1,500, thereby giving them a chance to improve on its average revenue per user (ARPU) to Rs 300 or more.
Will Reliance Jio play its big card on Friday, or will it be another damp squib? Stay tuned with The Quint to find out.
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