Reliance Jio is likely to launch much-awaited 4G VoLTE feature phone within this month, with putting the price at as low as Rs 500. A move which could bring in another major wave of disruption in the telecom market.
The launch —which some believe could likely be announced at parent Reliance industries annual general meeting on July 21. Would follow jio’s likely announcement of all new tariff plan with aggressive price-points. Over the next couple of days, people familiar with the matter said. The company’s 84-day Dhan Dhana Dhan offer — announced on April 11 — is drawing to a close.
Jio is likely to price its 4G feature phone at a paltry Rs 500 (sub-$8) in order to lure 2G subscribers to directly switch to 4G. Which implies jio subsidising each handset mainly by as much as $10-15 (Rs 650-975). Rajiv Sharma, HSBC director and telecoms analyst, said in a note seen by ET.
‘This launch can create a major next wave of disruption in the telecom market,” said a top executive of those one of the leading telcos. “Not only just us, but the existing players could surely lose a chunk of their low-end voice customers. Mainly most of whom are pre-paid — once this 4G featurephone is launched.”
Jio is the only available operator which runs a 4G VoLTE network. While its major rivals such as Airtel, Vodafone and Idea still are running trials on VoLTE. But haven’t launched commercially.
“We won’t get into this device price war. Let’s see how deep the hit is,” the executive said. Adding the “bloodbath in the market can greatly continue for another year”.He was referring to the ongoing brutal price war started since Jio’s entry last September. Which has hit the incumbent telcos’ revenue and profits and forced major raid consolidation in the industry.
Jio appears to be ready to flood the market with its 4G devices. Having placed orders likely for 18-20 million of the 4G VoLTE feature phones. Handset makers sell roughly on average 5 million feature phones and 15 million smartphones a month.
People are aware of the details said that shipments should begin from July-end or early-August. With the company looking at a possible launch for August 15.
ET had previously reported that Jio is likely to mainly subsidise part of the selling price. To make the 4G feature phones available at just about Rs 1,000 (about $15). And would come bundled with unlimited voice and video calling, besides digital content.
“Given Jio’s $29 billion investment so far in the telecom venture, we likely don’t think the new 4G entrant would have any hesitation in doing so (subsidising),” said the HSBC note. 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.
A telecoms analyst of another global brokerage, who did not likely wish to be named, said Jio will try to touch lower price-points.
Reliance Jio Dhan Dhana Dhan
“Besides the Dhan Dhana Dhan offer, it has some other plans that start at around Rs 150 a month. And also they may introduce one at as low as Rs 80-90 for the same period with an initial aim to bring down the average revenue per user (ARPU),” he said.
Under the Dhan Dhana Dhan plan, Jio is mainly offering free voice, unlimited SMS and access to Jio apps, and also 1 or 2GB of daily data for a one-time payment of Rs 309 or Rs 509. Respectively, only to its Prime members, who paid a onetime fee of Rs 99.
Reliance Jio may disrupt the market again, with Rs 500 handset