Reliance Industries (RIL) is gearing up for launching a slew of budget 4G phones to attract millions of users to the Jio venture.

American semiconductor major Qualcomm Technologies has already started supplying chips for the proposed budget 4G phones to Reliance. Reliance will sell the budget 4G phones under the existing LYF brand in the first quarter of 2017. MediaTek, the main rival of Qualcomm in the 4G chip space, missed this contract, according to industry sources.

Jio investment

Jio has also planned to install about 45,000 mobile towers in the upcoming six months to support its 4G network.

Jio plans to invest about Rs 1 lakh crore over a period of 4 years on its network beginning with the new towers.

Reports suggested that Jio informed the telecom minister on a Rs 1.6 lakh crore network investment done till date including 2.82 lakh installed base stations spanning over 18,000 cities and 2 lakh villages.

The problem of point of interconnection and resultant call failures on the network have also come down. This was after Airtel, Vodafone and Idea released additional points of interconnection (PoIs).

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Current data points to an average of 8.5 crore call failures among 30 crore call attempts from Jio to the leading three operators, as of last week.

This has significantly come down from the 50 to 60 percent call failure rate observed at the start of the month. The failure rate from Jio to Airtel has become 34 percent from the net 13.81 crore call attempts.

Also, the same with Vodafone was down to 26.7 percent in over 8.79 crore calls.

Idea saw the lowest call failure rate at 18.9 percent among 7.48 crore calls.

Though still not meeting the QoS standards set by the operator, the drastic situation has transformed.

TRAI allows for a maximum of 0.5 percent call drops against net calls made, totaling to only 5 among 1000 in a day.

Airtel offered 17,000 points of interconnection (PoI) to back around 75 million Jio subscribers, after the TRAI mandate on the same.

Airtel also conveyed that Jio should put them into operation as fast as it has been provided to tackle the situation.

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Meanwhile, Vodafone sources reported offering PoI to 50 million Jio subscribers.

All this was after TRAI imposed Rs 3,050 crore cumulative penalty on Airtel, Vodafone and Idea Cellular for not offering adequate interconnection capacity to Jio.

IDC says 4G smartphone shipments grew 24.8 percent over previous quarter in Q3 2016. Rollout of Reliance Jio network has increased the share of 4G enabled smartphones in India. 7 out of 10 smartphone shipped in Q3 2016 were 4G enabled and 9 out of 10 smartphone sold by eTailers were 4G.

Budget 4G phones

There are question marks on the quality of budget 4G phones. At present, even phones in the Rs 5,000 to 10,000 price range are unable to support data demands of Indian consumers.

Currently, 65 percent of Indian mobile phone subscriber base totalling to 1 billion are using feature phones. The main reason is the low cost associated with the phones available as cheap as Rs 3,000.

With Jio further cutting down the prices and offering VoLTE for voice calls, it will add more to the 25 million users added since September 5.

It may even achieve its target of 100 million in the shortest time, if the network prices are cheap even after the free offer.

Currently, Airtel has over 260 million subscribers in the country. Airtel is yet to disclose the 4G user base.

Currently Reliance LYF phones are being adopted all over the country, with targets of shipping and selling about 10 million smartphones in India by the year-end.

If Reliance launches feature phones worth only Rs 1000-1500, the telecom market will see an even more disruption than the one that occurred at the launch of the Jio.

Equipment provider Lava and Chinese providers are collaborating with Reliance for developing the feature phones.

A competitor to Reliance will be the China based equipment provider Transsion, with plans to launch 4G feature phones in India by April, under Itel India.

4G smartphone shipments escalated by 24.8 percent in Q3 2016 compared to the previous year quarter, mainly boosted by the launch of Jio Welcome offer, suggest IDC reports.

Also, 7 out of 10 smartphone shipped in Q3 2016 and 9 out of 10 smartphone sold by eTailers had 4G support.

India with about 40 million features phone sales in the Q3 2016 alone witnessed a growth of 18.6 percent. This is the section that Reliance is targeting to explore in the coming quarter.

Vina Krishnan
[email protected]