Reliance Jio's growth was exponential in the initial months of its launch but has gradually slumped. As per April 2017, the Mukesh Ambani-led company registered over 112 million subscribers. One of the biggest hurdles the company faces is the limited number of 4G-capable phones in the country. However, with what Jio has planned next the number might go way beyond the existing user-base.
According to a report by The Economic Times, Reliance Jio might soon launch a 4G feature phone priced at just Rs 500. Earlier reports suggested that these devices will be priced between Rs 999 to Rs 1,500 but this new report claims that the company will be subsidizing the phone to make the device cheaper and more accessible to the lower end of the consumer base.
This new move will be another major disruption after Reliance Jio's mega launch of Jio 4G services back in September last year. With such a low priced 4G feature phone, the impact of the Reliance Jio will be felt not only in the telecom industry but also among feature phone manufacturers.
The low price will facilitate more buyers to shift to 4G network without the need of an expensive smartphone.
The report suggests that Jio has already placed orders for around 18-20 million 4G feature phones with Chinese manufacturers namely, Zhejiang Techain Electronics Technology Co., Shenzhen CHINO-E Communication Co, Crave and Megaphone. The shipments could begin as early as the end of this month or the first half of next month.
We are not sure if these subsidized phones will be launched as a part of an offer from Reliance Jio or will be stand alone devices. Considering that the company will be subsidizing about two-thirds of the actual cost of the device, there is a high chance that the 4G feature phone will come bundled with a Reliance Jio connection. A similar model is followed in most developed countries where carriers tie-up with manufacturers to drastically bring down the prices of the handset.
Along with the device, the company is also expected to launch cheaper data plans, reducing the average revenue per user (ARPU). The new plans can go as low as Rs 80 to Rs 90.
Since Reliance Jio's Dhan Dhana Dhan offer is also coming to an end, the company might make an announcement regarding the new plans to either replace them or apply standard charges instead.