It looks like the the latest entrant in the telecom sector Reliance Jio is now planning to disrupt the mobile space as well. According to a Firstpost report, Jio may launch a feature phone that is 4G enabled but can be sold at less than Rs 1500 to the end user. Reliance Jio is apparently in dialogue with some Chinese phone makers to enter into a tie-up. The Chinese companies’ names being mentioned in these reports are Techchain, FortuneShip and Uniscope.
This move makes sense because the 4G SIMs that Reliance Jio is distributing is not compatible with 3G smartphones even and with a large number of rural users in India still using feature phones, Reliance Jio is trying to tap this market as well for its voice services. If the company succeeds in getting the Chinese phone makers to come up with a phone within this budget, the subscriber base can be expanded exponentially.
Numbers very important
To put this in perspective the company made a grand announcement that it has reached 100 million subscribers. However this was when Reliance Jio was still offering its services for free. Come April 2017, this figure was being quoted as 72 million or 7.2crores. Now the company tried extending the free service but TRAI stepped in and it had to resort to pricing the services.
Being the largest corporate entity in the country, Reliance would want to consolidate its position within this vertical too and here it is the number of subscribers that matters. The recent announcement of the merger of Vodafone and Idea will only make it tougher for Reliance to reach those figures.
It is in light of this, the latest move by Reliance Jio to rope in the last mobile user in the country into its fold is quite understandable.
Purely from the price angle, the current prices for 4G enabled feature phones are being sold at around Rs 3000 and there are reports that two Indian players, Micromax and Intex could be launching their products at around Rs 2000. If the quest for a sub Rs 1500 phone is successful, the company can still reach some landmarks.
The issue of contract manufacturing will also come to the fore. The company already has an understanding with Spreadtrum Communications, a Shanghai-based company for making the Flame 5 smartphones. One will have to wait and see how this new arrangement will pan out.