After unleashing a tariff war on rival telecom companies, Reliance Jio took its freebies a step further when Reliance Industries' Chairman Mukesh Ambani announced the launch of free 4G VoLTE JioPhone against a refundable security deposit of Rs 1,500.
Jio's feature phone, which will be available on pre-booking from August 24, is expected to disrupt the feature phone market in the country. The existing feature phone makers such as Nokia, Intex, Karbonn, Lava, InFocus, Micromax, Zen, iBall, Adcom and Philips may also cut down their prices to stay relevant in the market.
With the launch of its 'effectively free' JioPhone, Reliance Jio is eyeing to expand its marketshare in the telecom business. Jio, which acquired a 9.9 per cent market share in March, had largely a subscriber base of users who had dual sim smartphones. With the new phone, Jio plans to take in its fold around '50 crore feature phone users' in the country.
Ambani said one-time fully refundable security deposit is to ensure that no one misuses the offer and hoards phones. After 36 months, a JioPhone user will be eligible for a full refund of the security deposit, Ambani said in his speech at Reliance Industries' AGM in Mumbai.
While the new JioPhone may not affect the sales of mid-range Android phones, handsets priced under Rs 5,000 are likely to bear the brunt.
However, the new JioPhone is not just for people who can't afford smartphones. With its virtual 'zero' cost, JioPhone is likely to attract even those who already use high-end smartphones.
RIL is also aggressively expanding in OTT content space. Just yesterday, it acquired a 24.9 per cent stake in Balaji Telefilms. The stake will give Reliance Jio Infocom Ltd. access to content generated by Balaji Telefilms.
"This investment in content production (including digital content) is in line with RIL's commitment to invest and grow in telecom, digital and media businesses," RIL said in a statement.
Jio TV app currently offers 432 live channels across 15 regional languages. The telecom start-up has joined hands with Hotstar to offer Jio TV services to its users.
Jio has already signed deals with broadcasters like Star India, Zee Entertainment Enterprises, Sony Pictures Networks India, Bollywood studios such as Eros International, Shemaroo, Balaji Telefilms, Venus and Rajshri Productions, to get content on its platform. Viacom18 a joint venture of RIL-owned Network 18 and Viacom has a portfolio entertainment channels such as Colors, MTV, etc.
JioPhone could deal a body blow to existing telecom operators who are already facing a storm with Jio's aggressive tariffs. With the launch of a new hardware, Reliance Jio would be able to take on its rivals with device, cheap data and OTT content.