Reliance Jio has been boarding Indians on their hype train for the past one year or so. The latest promo being the effective zero price JioPhone launch on 21 July 2017. As always Jio has to face a flurry of questions, and COAI called it Clever Marketing. So, what exactly does it offer, why is this a clever marketing move, what challenges does it create? Let’s analyse the good and bad sides of this move by Jio.

The Good

JioPhone is termed ‘India ka smartphone‘ by Mukesh Ambani. It looks just like any other feature phone but with 4G VoLTE capabilities and possibly runs an android based OS or KaiOS based on Firefox OS. It may have two variants powered by Snapdragon 205 SoC or Spreadtrum SoC as the two companies already tweeted their partnership with Jio.

JioPhone At Effective Zero Price - The Good And The Bad

With a fully refundable security deposit of Rs 1500, a subscriber can recharge for tariffs starting as low as Rs 24. The JioPhone TV Cable package turns your old CRT or any compatible display to an IPTV, with which you can stream loads of content based on your subscription. The phone comes preloaded with Jioapps and apps like Facebook lite, YouTube. On the other hand, if it based on android you could also side load apk of most apps. To sum up the good things, 4G will reach lower ARPU or rural subscribers.

The Challenges

JioPhone will make the 2G feature phone obsolete,’ claims Mukesh Ambani. It will pose a competition to other feature phone players. Features like TV connectivity will be a threat to existing DTH and cable service providers. Manufacturers of existing entry smartphones with 4G capability will have to set new pricings. Currently, very few manufacturers like LAVA has 4G enabled feature phones and we can expect more to come in no time. Fear of losing subscriber base will force other carriers to provide matching offers like a free 4G feature phone. In short, the JioPhone has set some revolutionary challenges.

The Bad

Now you might think, what is the bad thing about this launch. Well, literally there isn’t much, but some can’t be ignored. Jio is a smart player and government might miss some levy from their service. Since the handset price is effectively zero, no licence fee or spectrum usage charge has to be paid. For the subscribers, investing Rs 1500 won’t matter much but sticking on to a handset for 3 years does.

Coming back to functionality, if based on Firefox OS, app availability will be less, and India’s favourite app viz Whatsapp won’t be there. The bigger threat will be the dominance of a company over other market players. To conclude, remember, Jio’s LYF handsets weren’t a great success and bundled phones never prospered big time in India. Hope the analysis helped you, Peace!

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