Jio's new phone is likely to increase competition in the market.
In an era when feature phones are steadily being phased out of use at every level of the consumer base, Reliance Jio Infocomm Ltd launched an internet-enabled Jio Bharat feature phone at "attractive pricing" on Monday.
This launch will enable Jio to gain market share at the lower end of the segment and signal a reduced probability of a tariff hike in the near term.
The internet-enabled Jio Bharat feature phones start at Rs 999, packing in a cheaper monthly plan of Rs 123 for unlimited voice calls and 14 GB of data. The new offering aims to accelerate the '2G Mukt Bharat' vision, as India still has 250 million mobile subscribers trapped in the 2G era with feature phones.
Jio Bharat will increase competition as the billionaire Mukesh Ambani-controlled operator targets the 25 crore low-cost 2G users of rivals Bharti Airtel Ltd. and Vodafone Idea Ltd. The users will get unlimited voice calls and 14 GB of data for Rs 123 per month. The annual plan will cost Rs 1,234 for 168 GB of data.
These new tariff plans are 30% cheaper than competitor plans and offer access to the JioCinema OTT app, JioPay, and JioSaavn music app, BofA Securities said in a note on July 4.
According to the research firm JP Morgan, the new phone could disrupt the 2G market and help Jio gain market share after the fading success of JioPhone devices. JP Morgan believes this phone can take Jio's market share at the lower end of the market. And this also puts Bharti Airtel at risk as it can see increased churn from its recent 2G price action of increasing the Rs 99 plan to the Rs 155 plan. Jio already.