How JioPhone will fuel increase in mobile Internet penetration

jio-music-v7Reliance Industries (RIL) Chairman Mukesh Ambani’s strategy to bring out a cost effective VoLTE phone to taken on Airtel and Vodafone-Idea will revolutionize Indian phone market and enhance mobile Internet penetration.

Increase in the adoption of budget VoLTE phone will positively impact the growth of mobile Internet in India. In addition to Reliance Jio, Bharti Airtel, Idea Cellular, Vodafone, Reliance Communications, and BSNL are looking for enhancing their mobile Internet reach.

India has 272.85 million mobile Internet subscribers out of the 1,019.55 million active wireless subscribers, according to TRAI.

Reliance Jio Infocomm is the mobile Internet market leader with 117.34 million users.

Mukesh Ambani confirmed that Reliance Jio has more than 100 million active Internet users out of 125 million subscribers on its all-India 4G network.

Mukesh Ambani’s Jio, which is taking on rival Sunil Mittal’s Bharti Airtel, is offering free or cost effective services to attract customers to its all-IP network.

Bharti Airtel is in the second position with 51.21 million mobile Internet users on its 2G, 3G and 4G networks.

Mukesh Ambani today hinted that JioPhone can assist India to enhance mobile Internet penetration and becomes the top mobile Internet nation in the world.

Vodafone has 40.42 million and Idea Cellular has 24.63 million users.

Reliance Communications has 14.46 million users in the Indian mobile Internet market.
Jio broadband market share in April 2017

JioPhone to revolutionize phone market

The feature phone segment is still very active in India and close to half a billion such handsets will be sold in the next five years, IANS reports.

“JioPhone is a move to reach out to the next 100 million users. With a installed base of 400 million feature phones in India, the market is big enough for Jio to target feature phone users with disruptive offers and an effective price of Rs ‘zero’ for a device,” said Tarun Pathak, senior analyst, Mobile Devices and Ecosystems at Counterpoint Research.

Navkendar Singh, senior research manager at IDC India, said JioPhone will have a significant impact on the 2G feature phone market in the country.

Till now, a feature phone user is not migrating to smartphone due to affordability, device quality such as battery life and ruggedness, etc. and general ease of using the smartphone.

“With the JioPhone, these users will get a taste of data and video which they have not been able to till now since there was no offering at such price points. Subsequently, these users will be expected to migrate to smartphones in the next two-three years,” Navkendar Singh said.

JioPhone is also going to change the feature phone market for other players in the segment.

The replacement cycle of feature phones was four years till date but JioPhone will now shorten that cycle and you will expect a lot of people to upgrade to the new VOLTE-enabled JioPhone.

According to Counterpoint Research, the feature phone shipments in India will be around 130 million this year.

Since the base for 4G feature phones is around 400 million and even if one-third of these users plan to upgrade, this will lead to 133-150 million new user-opportunity in the short-term period, Pathak said.

The pre-booking for JioPhone will start from August 24 and it will be given away on a first-come-first-served basis. It will be available for all from September.

JioPhone will offer free voice calls and SMS to customers. For 4G data, customers need to pay Rs 153 per month. The phone is pre-loaded with applications like Jio Cinema, Jio Music and others.

Narinder Kumar, analyst at Cybermedia Research, said the feature phone from Jio will impact the current market of 2G handsets as well as the entry-level smartphone segment.

Anshul Gupta, research director at Gartner, the move is going to create a certain disruption at a time when data consumption is on the rise and JioPhone will help create more customer base amid the ongoing data tariff war.