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Published On: Sat, Jul 22nd, 2017

5 million Jio Phone units will be available weekly

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1500572163-3217NEW DELHI : Mukesh Ambani, Chairman of Reliance Industries launched the most-awaited JioPhone and announced its availability for trials to select customers beginning August 15 at the company’s 40th Annual General Meeting.
In the event he said that the handset will publicly go for pre-bookings starting August 24. Post booking, it will be delivered on first-come-first-serve basis from September.Those who are interested, can book a JioPhone through the MyJio app or by visiting a nearby Jio retailer from 24 August. Under the effective zero price offer announced by company’s chairman, interested users will have to pay Rs 1500 as a refundable security deposit. The amount can be refunded after 3 years.  5 million JioPhone units that will be available weekly for Indian customers.
To recall, the phone will come with unlimited voice, data and texts. The users will need to recharge with a Jio Dhan Dhana Dhan monthly plan of Rs 153 that will enable them to avail the facility of free voice, texts, unlimited data and free access to Jio apps.
The a Jio Phone TV Cable accessory can be used to connect their handsets with any kind of television sets.In order to connect TV with phone, customers will have to recharge with Rs 309 per month pack for big screen. Jio Phone supports 22 languages and can be controlled via voice command. To tackle the malware problem, panic button will also appear in near future that could be enabled through long press of number 5 on Keypad.
With a mobile density of over 92 per cent, the country is a mature telecom market. So, any new player has to grab customers from incumbent operators. That is what Reliance Jio has successfully done to grab over 117 million customers — that is, 9.94 per cent of total subscriber base (till March end) and nearly half of the country’s smartphone users.
But its net addition per month has been slowing to half from 8-10 million earlier. The initial blast of subscribers were drawn by the promise of free service. From September last year till March 31, its services incurred no cost for users.
While this move by Reliance Jio hurt overall revenues of incumbents (they were forced to lower tariffs ), it did not make a big dent in their subscriber or revenue market share. That is because most of Reliance Jio’s customers use dual SIM phones, and they have not forsaken their old connection. So Airtel has maintained its subscriber share at 23.59 per cent at the end of March 2017, and the three incumbents together have lost less than a per cent of their customer base.

But Reliance Jio has substantially cut into the subscriber share of smaller players like Reliance Communications, Aircel, Tata Teleservices and Sistema. In April, for instance, these players together lost over five million customers, many of them to Reliance Jio. Their active subscriber market share is down from  24 per cent in September 2016 to 19 per cent in May this year.

The big three players, on the other hand, have not only maintained, but increased their revenue market share —from 74.6 per cent in the December quarter to 76.5 per cent in the March quarter. As Reliance Jio did not book any revenue till March end, their revenue share wasn’t affected. However, the equation could dramatically change with the launch of the 4G feature phone through which Reliance Jio plans to woo a large part of the 650 million feature phone customers who mostly use voice.

If Reliance Jio’s gamble works according to plan, the big three incumbent players could lose a lot of customers to Jio.  The impact could be worse for smaller players as the move could accelerate the pace at which they are losing customers, making consolidation inevitable. In the end, there might be just four players remaining, dividing the market among themselves.

Unlike smartphone users, who spend more money, feature phone customers have an ARPU (average revenue per user) between Rs 70 and Rs 100, and use it mostly for voice. They typically cannot afford two numbers and two separate SIMs.  Reliance Jio’s offer is attractive enough for them to shift from their 2G feature phones — it offers unlimited free voice and a subsidised 4G handset bundled with data at rock-bottom price. Also, Reliance Jio by cleverly locking the SIM to the device has safeguarded itself against customers using its phone with a competing SIM. with Agency inputs).

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