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JioPhone To Spur Demand For Data Services In Big Way: Report

Some analysts say that other telecom operators could take cue from JioPhone and launch their own 4G feature phones in association with handset-makers.

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JioPhone To Spur Demand For Data Services In Big Way: Report

With JioPhone, Jio is targeting the 50-crore-strong feature phone market in India


Highlights

  1. JioPhone widely expected to add new segment of subscribers to Jio network
  2. Nearly 50 crore mobile owners outside data ambit, says Angel Broking
  3. Other firms could launch their own 4G feature phones, some analysts say
Ever since billionaire Mukesh Ambani announced the launch of JioPhone last month, the 4G feature phone has attracted a lot of buzz. For Reliance Jio, the JioPhone is widely expected to add a different segment of customers, who are looking to upgrade from their calls-only phones. Some analysts also say that other telecom operators could take cue from JioPhone and launch their own 4G feature phones in association with handset-makers. The JioPhone has been priced at an 'effectively free' cost. With the JioPhone, Jio is targeting the 50-crore-strong feature phone market in India. In a blog post on its website, domestic brokerage Angel Broking said: "Today, nearly 50 crore mobile phone owners are outside the data ambit since they do not have smartphones. Jio is now proposing to launch special LTE smart phones at zero cost and just entailing a refundable deposit of Rs.1,500. That is likely to open up the demand for data services in a big way."

"RIL's telecom bet could be a true-blue game changer for the group. How competition actually reacts will be the second part of the story!" Angel Broking's further noted in its post.

Here are five other things pointed out by Angel Broking in its July 25 post:

1. Effectively, 90 per cent of Reliance Industries' total investment into its telecom arm Jio has "already been recouped by RIL shareholders in the form of value accretion".

2. RIL shares have risen 56.18 per cent in the past one year. The brokerage said that the movement in RIL share price as "a phenomenal performance for a stock of that size".

3. The amount that Reliance Industries has sunk into the Jio business is around Rs 2,00,000 crore. As a result of the Jio venture, RIL's market cap has risen by nearly Rs 1,80,000 crore in the past one year, Angel Broking said.

4. When the cash flows from Jio actually begin to show up meaningfully, the impact on valuation will be much bigger, it said.

5. "The real alpha for the RIL stock came after the launch of Reliance Jio in September last year," it noted.


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