Freebee Jio phone: Game Changer For 500 Million Telecom Users

Jio that has pierced its way into the country’s mobile industry gave another stab at rivals through the introduction of an ultra-low cost, web-enabled cell phone for the masses. Mukesh Ambani, RIL Chairman, has announced the launch of the JioPhone at the company’s 40th annual general meeting (AGM) in Mumbai on Friday.

Do you wonder what’s the game plan behind it? Read on.

You must first know the features of the phone
Jio phone will be featured with full 4G VoLTE (Voice over LTE) capabilities that will be available sometime in September for ‘an effective price of Rs 0. Customers will be required to pay a refundable security deposit of Rs 1,500 after three years.

Unlimited voice, SMS, and data will be available to the Reliance Jio phone’s users for a monthly plan of Rs 153. Weekly plan for Rs 54 and a two-day plan of Rs 24 with the same benefits will also be offered. Also, Jio is providing applications that include the pre-loaded Jio apps as well as live TV and YouTube. Cable television programs can be streamed for Rs 309 per month, to their TV sets. The function supports old cathode ray TVs also.

Will jio phone be a huge hit?

Jio has created a new market between 2G feature phone users and smartphone users. While 2G phones are available at Rs 700, a 2.4-inch phone (the size offered by Jio) costs Rs 1,100-1,200. So the security deposit that Jio is asking for is near that number. Entry-level 4Gsmartphones in India still cost beyond Rs 3,000.Jio has bridged the gap by subsidizing a phone to obtain customers.

The success of the Jio phone would be shouldered on 2G phone customers doubling their present monthly bill on mobile services. The country’s average revenue per user currently at Rs 80 for feature phone users and fixed at around Rs 104 overall – will have to go up considerably.Jio is offering users an attractive cocktail– unlimited calls (earlier the feature phone users had only limited call time), as well as unlimited data with a cap of 0.5 GB per day (earlier they had no or minimal data usage) on a Rs 153 pack.

Reliance Jio is offering the handset with a refundable deposit of Rs 1,500.This helps the company gather a huge amount of money upfront, the effective cost for the customer is only the notional interest for Rs 1,500, which is negligible of course.
The company had to build out networks to bring coverage to rural areas.
With 500 million users in the telecom market, Jio is looking to catch at least a fifth of this market. If it wins, it could see its market share going up to around 20 per cent. That would bring it close to the big boys of telecom and clearly speed up a process of consolidation.
Jio’s achievement till date:

Mukesh Ambani informed the following key points about Jio Infocomm Ltd, the wireless unit of retail-to-refining conglomerate (RIL)
* In less than 170 days, Jio hit 100 million, 7 customers per second.
* After the initial launch of Jio data consumption increased to 120 crores GB every month.
* India’s data consumption since the launch of Jio is over 125GB per month.”

The status of ongoing business war in telecom space:

Competitors’ shares plunged. Bharti Airtel said in a July 20 statement that “Jio’s business practices will allow the upstart “to use its muscle power and price its services in a predatory manner to kill the rest of the industry and create a monopoly”.

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