The Jio Phone effect: Will other brands sustain through the storm?

As Jio 4G phones hit the market, will other brands be able to sustain through the storm?

e4m by Ronald Menezes
Updated: Aug 7, 2017 8:06 AM

With the launch of the highly-anticipated Jio 4G feature phones, the question that ought to be asked is that can we anticipate an increase in demand in 4G feature phones? Needless to say, that with all the fanfare around the cheapest 4G phone, Reliance’s competitors could be facing a tough task in the months to come. So will others come up with similar offers to mitigate damage?

As announced in July, August 24 has been slated as the launch date for registration of Jio phones. Consumers and businesses can book phones both offline and online by signing up on the Jio website. Reliance has now opened another dimension of its business. Just like it disrupted the lives of telecom operators and cemented its place with a strong market share with Jio, the corporate giant has leaped into the highly competitive smartphone space.

With regard to affordability, Mukesh Ambani at the 2017 Reliance AGM had said “I am putting an end to unaffordable data, with this all unlimited, Jio Dhan Dhana Dhan plan of rupees 153 per month for the JioPhone! There will be a fair usage policy of half a GB per day, to ensure that bandwidth is fairly apportioned for every user.”

Affordability –the master-marketing key that kept Jio going

Affordable device – The JioPhone is an extremely affordable 4G enabled device. The affordability makes it a phone that is easy to own and with cheap data plans the phone is expected to sell like hot cakes.

Affordable data – Smartphones have been an easier way to get in touch with people as compared to those with feature phones. Call rates and messaging charges are higher on cellular network as compared to those made through Whatsapp or Skype. Therefore, cheaper data has brought more people on the smartphone platform and with the launch of JioPhone this is deemed to be better news for both, Reliance as well as its customers.

Good Connectivity – Jio has focused on a very data strong network built for the internet. TRAI has declared Jio as the leader in 4G coverage through its TRAI SpeedTest Portal. Over the next year Jio plans to cover 99% of the country’s population as Jio’s 4G coverage will be more than 2G.  

Lavin Punjabi, President & CEO, Affinity, spoke to exchange4media, sharing some interesting details on the increased mobile consumption. “Prior to Jio's launch 64% of the mobile content consumption occurred when a user was connected to WiFi, 32% from top three carriers (Airtel, Vodafone and Idea) and 4% from the remaining carriers. As of July 2017, we see Jio at 40%. WiFi at 33% (down from 64%), Top three at 23% (down from 32%) and 4% from the remaining carriers,” pointed out Punjabi.

He explained how Jio expanded the content consumption landscape drastically. “We are in the business of displaying ads. So more articles people read on various websites on their mobile devices, the more opportunities we get to display ads. Because of Jio phones, we have seen increased consumption of mobile content on our partner websites,” he said.

“This is not intended to suggest that Jio has taken away share from others - they have increased the size of the pie and now dominate by driving content consumption.”

Sustaining the storms

Jio’s entry in the smartphone category could now disrupt the market share of big players and more importantly the smaller players like Micromax, Karbonn and Lava. Also, by the end of Q4, the International Data Corporation released a list of the market share held by smartphone companies in the Indian market. Samsung was leading the roost with a market share of 25.1% followed by Xiaomi, Lenovo, Oppo and Vivo. There were no Indian manufacturers in the top five while Chinese players basked in glory.

The budget-friendly Jio 4G feature phone is available at a one-time fully refundable deposit of Rs 1,500 per unit. In the face of this cut-throat competition, most of the hand-set makers could be already working on their own low-cost 4G devices. Apart from Jio, home-grown mobile firm Lava has already launched a 4G feature phone using Spreadtrum chipset, named 4G Connect M1.

 Another mobile phone firm Intex has also launched a 4G feature phone, christened Turbo+ 4G, which will be hitting the market around Diwali this year. Apart from this, Micromax has also said that it will launch its own 4G VoLTE featurephone - Bharat 1 - at Rs 1999.

Rumours have been rife that Vodafone and Bharti Airtel are driving discussions with handset vendors for bundling voice and data services with 4G VoLTE feature phones ahead of the availability of JioPhone. Hit by Jio’s aggressive strategy, Idea Cellular is working with other handset makers for ‘affordable’ mobile phones.  In the coming days, it will be interesting to see whether the incumbents will respond to Jio’s well-played move.  Turns out that they will step up their marketing game.

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