5 ways the new Jio Phone is changing telecom era for us
In November last year, Reliance Jio had talked about its plans to introduce a feature phone with 4G capabilities for just Rs 1,000. Earlier this month, reports suggested the phone could make it to the market with a price tag of Rs 500. But as it turns out, Mukesh Ambani-led Reliance Jio proved such reports wrong and at its Annual General Meeting (AGM) on July 21, announced the Jio Phone for "free".
The phone will go on beta trials as early as this Independence Day and may be available in September 2017, with just a refundable deposit of Rs 1,500 – an amount which cannot be claimed before 36 months of using the phone.
Ahead of the phone's launch, we take a look at how the Jio Phone could change things for the average consumer in India.
Another round of price/tariff cuts
For Jio, this device may represent its latest move to win more consumers, but from the industry's perspective, the Jio Phone could very well end up being a major disruptor of the prevailing status quo. After the entry of Jio in the market last year, incumbent operators held onto dear life thanks to their existing consumer base of 2G users, which Jio could possibly not touch because of bottlenecks in its network.
However, that will now change. With these 50 crore feature phones now up for grabs, telecom operators like Airtel and Vodafone will have to course correct. Just like last year, the incumbents will have to indulge Jio in another bloodbath of price cuts and tariff adjustments to ensure their survival.
End of the 2G/3G era in India
2G networks started operations almost 25 years ago in India. Since then the world has moved on to 4G, while a few countries have even started laying the groundwork for next-generation 5G technology. However, as things stand, India – one of the biggest telecom markets in the world – still remains a country primarily using 2G and 3G for its telecom needs.
However, if Jio can have its way, this might soon change. With the Jio Phone's success linked to Mr Ambani's promises of fast migration of 2G subscribers to 4G VoLTE, the device might just be able to help Reliance Jio achieve its goal of a market with a majority of 4G users.
There's no denying that it would take some doing, but if this target is achieved, it will be the death knell for the reign of the 2G and 3G networks in India.
Disruption in the DTH sector
Another sector that the Jio Phone could have a deeply disruptive impact on is DTH. With a free cable and pre-loaded Jio TV/Cinema app, the Jio Phone can essentially be turned into a low-cost DTH device. According to Ambani's claims, over and above the promised unlimited voice calls and data, users can enjoy up to 5-6 hours of Live TV by topping up their accounts with a Rs 309 recharge.
In a country where access to television in most parts is available through expensive DTH hardware and costly monthly packs, this can be a revolutionary way of bringing Live video content to millions of users at an affordable price.
Jio Phone - end of 4G network woes?
With an investment of more than Rs 1.9 lakh crore, Reliance Jio entered the telecom sector in India in September 2016 with a fully 4G network. It's entry forced the competition to ramp up their 4G infrastructure.
Suddenly 4G became the new buzz word, but as things stand, much of country still suffers from poor 4G connectivity. Most parts of Bharat still remains out of the reach of this 4G revolution.
However, the entry of Jio Phone – a low cost device primarily for users in rural areas – will force Reliance into improving 4G connectivity across the country. This move would then lead to competitors also pumping in more to improve connectivity, thus helping improve the spread of 4G throughout the country.
Shake things up in the low-cost phone market
A year after causing a major stir in the telecom sector, Reliance Jio's chairman, Mukesh Ambani matched – if not improved on – the explosiveness of last year's announcements. With Jio, Ambani changed how the telecom sector operated in the country, and now the Jio Phone could shake things up in the feature phone manufacturing industry.
The device, with smartphone-like tricks up its sleeve, could force low-end feature phone manufacturers like Micromax, Lava and Intex into going back to the drawing board to create products that can match the Jio Phone's features at a comparable price.
This shakeup could cause a ripple effect that would lead to a price cut not only in feature phones from these manufacturers but also other sub Rs 5,000 budget offerings.