NEW DELHI: The new 4G feature phone launched by the country’s largest telecom service provider Reliance Jio will disrupt the telecom industry, and cement the company’s dominance in the market, according to brokerages.
Jefferies said Jio Bharat will help the telco gain 20-22 million subscribers annually and a 2-3% boost to its FY25 revenues/ Ebitda. The launch is likely to impact the revenue of the country’s second-largest telco Bharti Airtel. “The move could drive 20-22 million subscriber additions for Jio annually, resulting in a 2-3% boost to its FY25 revenues/ Ebitda, but may impact Bharti’s FY25 revenue/Ebitda by 1-2%,” reads a study by Jefferies.
However, the brokerage also noted people will initially be reluctant to buy Jio Bharat, and it will work as the replacement feature phone market. According to Jefferies, 2G feature phone, subscribers are quite discerning and usually don’t change their handsets unless the existing handsets stop working.
Jio launched JioPhone in 2017 which helped migrate over 100 million 2G feature phone subscribers to 4G.
“With Bharti Airtel and Vodafone Idea raising voice tariffs by nearly 80%, Jio’s new offering is likely to boost its market share among feature phone users,” said the brokerage.
The bundled scheme gives an edge to the company as it offers unlimited voice calls and 14GB of data at `123 per month. The tariff is almost 30% lower than Bharti Airtel and Vodafone Idea. “This could disrupt the 2G market and help JIO gain a shared post-fading success of Jiophone devices. Bharti recently raised 2G prices from `99 to `155 across all circles while Vodafone Idea took this in one circle. This disruptive step can halt incremental tariff increases for 2G and help JIO gain share in that segment,” said JP Morgan.
The beta trial of this phone will begin from 7th July and Jio sees an opportunity to tap 250-270mn feature phone users. The phone comes with a 2-inch phone with a 0.3 VGA camera and comes with inbuilt apps such as JioSaavn and Jio Cinema. The company also offers UPI through Jio Pay. It has an inbuilt memoir of 48GB extendable up to 128GB through a micro SD card.