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With the launch of JioBharat platform, Reliance could reach over 100 million 2G users, according to analysts. At ₹999 starting price, phones using this platform will be priced nearly 20 per cent lower than the cheapest feature phones in the market, according to market research conducted by Emkay Global Financial Services. Analysts believe that the platform is launched at an opportune time and could replicate the success of the original Jio Phone launched in 2017.
Reacting to Reliance’s Monday announcement, the Emkay report observed, “We believe JioBharat can repeat the success of JioPhone to reach over 100 million users, as “there is an addressable market of over 250 million users, where the device was a key challenge. With Jio’s network and distribution strength along with JioBharat device, Jio would be able to capture over 40 per cent market share.”
The report added that given the recent increase in 2G tariff by competition and limited availability of affordable feature phones, JioBharat is coming at the right time to accelerate the 2G to 4G transition and enable digital experiences for masses.
However, given the extreme price sensitivity of the 2G user base, experts believe that Reliance’s JioBharat platform won’t affect the 2G customer base of Vodafone Idea and Bharti Airtel.
A report by Citi explained, “We estimate the feature phone segment contributes 20 per cent of mobile revenues for Bharti (of which 5 per cent is the entry-level segment) and 30 per cent for Voda Idea. However, given the extremely price-sensitive nature of this segment, we do not believe these revenues are immediately at risk as subscribers are unlikely to be willing to spend an additional about ₹1,000 upfront to purchase the phone right away. Nevertheless, this could help Jio grab market share among new feature phone sales (shipments averaged .5million/month last year) and, thereby, expand its subscriber base in the 2G segment.”
Analysts concur that Reliance’s renewed focus on the lowest paying subscribers likely means that there is no tariff hike at the entry level for its subscribers in the near term.
On Monday, Reliance launched a platform called JioBharat which aims to create internet-enabled feature phones to transition India’s 250 million 2G subscribers to 4G cellular networks.
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