mukesh ambani jio phone

Mukesh Ambani-led Reliance Jio has announced a new internet-connected 4G phone priced at just under Indian rupee 999 or $12 as the telecom giant looks to target 250 million Indians who are currently using feature phones.

Ambani launched Jio in India in 2016 when the industry had around a dozen players. The company offered data and calling for free to begin with, and subsequently priced the service way below competitors.

Jio’s aggressive pricing led to the eventual demise or mergers of many telecom players in India and the industry is now an effective duopoly with Jio and Bharti Airtel holding a 35.1% and 31.4% market share respectively.

india telecom market share
Source: IBEF (rounded off)

Vodafone Idea holds a nearly 22% market share but the cash-starved company is struggling with a massive debt load.

Meanwhile, Jio has now come up with a new handset and lower-priced data plan for those who might have found the costs of smartphones and data packs prohibitive.

The company would offer a monthly pack for just under $1.5 which offers 14GB of data along with free unlimited calls.

india data plans
Source: Jio

Jio would begin the beta launch of its “Jio Bharat” phone from July 7 with 1 million headsets which Ambani said would help “250 million mobile phone users in India who remain ‘trapped’ in the 2G era, unable to tap into basic features of the internet at a time when the world stands at the cusp of a 5G revolution.”

Ambani Looks to Disrupt Indian Telecom Market Yet Again

Notably, Meta Platforms and Alphabet invested in Jio but the new headset from the company would not have WhatsApp and Facebook.

Last year, Reliance Retail partnered with WhatsApp to let customers shop for groceries on the messaging app.

With the Jio Bharat phone, Ambani is yet again looking to disrupt the Indian telecom industry. The company launched a 4G-enabled handset in 2017 and the JioPhone Next smartphone in 2021 but the latter wasn’t much successful.

Now, with Jio Bharat phone priced even below feature phones, Ambani is all set to shake up the country’s telecom ecosystem yet again.

The company said that along with Reliance retail, other phone brands would also adopt the “Jio Bharat Platform” to build the phones. Indian brand Karbonn has already partnered with Jio for the new phone.

india smartphone market share
Source: Counterpoint Research

Chinese Smartphone Companies Have Captured the Indian Market

Samsung is the biggest smartphone company in India and according to Counterpoint Research, it accounted for 20% of the market in Q1 2023. Chinese brands Vivo, Mi, Oppo, and Realme had a market share of 17%, 16%, 12%, and 9% respectively.

The market share of Indian smartphone companies has fallen gradually as Chinese companies have captured the market with their competitively priced offerings.

Despite the growing India-China tensions, Chinese smartphone brands continue to remain popular among Indian consumers.

Reliance is looking to assemble the Jio Bharat phone in India but might need to import many of the components.

Things might change in the coming years as India strives to move up the value chain. The country is incentivizing domestic chip production and several global chip giants are looking to invest in India.

According to Counterpoint Research, 4G feature phones account for only 1% of the total feature phone sales in India.

Tarun Pathak, an analyst at Counterpoint Research believes that Jio Bharat can plug the gap and said, “4G is still a significant opportunity in India considering the 5G devices remain elusive from the sub-10,000-rupee segment … and will also help Jio in giving consumers a taste if its services ecosystem.”

internet penetration
Source: Datareportal

Ambani’s New Phone Could Increase Internet Penetration in India

India’s internet penetration is just above 50% which is below the global average of 64.6%. Notably, mobile data costs in India are among the lowest globally, and with his new Jio Phone Ambani could help increase internet penetration in the world’s most populous country.

His Reliance Industries is among the beneficiaries of rising digitization in India and the Jio Bharat phone could be a win-win for him as well as Indian feature phone users.

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