JP Morgan expects that the introduction of Reliance Jio's affordable 'Jio Bharat' smartphone will bolster the telecommunications giant's market share in the lower segment of the market. In its report titled 'India Telecom,' JP Morgan states that 'Jio Bharat' is poised to disrupt the base of the pyramid. Reliance Jio unveiled the 4G-enabled phone on Monday, priced at a mere Rs 999 per unit, marking the lowest entry point for an internet-capable mobile phone.
By subscribing to a monthly recharge plan of Rs 123, users will enjoy unlimited voice calls and 14 GB of data, in contrast to other providers' Rs 179 plan that offers voice calls and a mere 2 GB of data. Jio highlights that in India, there are still 250 million mobile subscribers confined to the 2G era with feature phones.
These feature phones fail to provide internet access, particularly at a time when access to technology is imperative, fostering one's livelihood and economic well-being. Jio Bharat aims to empower every Indian with the potential of digital services, particularly those who cannot afford a smartphone, as per Jio's official statement. The beta trial for the first 1 million Jio Bharat phones will commence on July 7. The phone comes preloaded with applications such as JioSaavn and Jio Cinema, and it also facilitates UPI transactions through Jio Pay.
"This groundbreaking move could halt the ongoing tariff hikes in the 2G segment and enable Jio to expand its market share in that sector. Jio has already demonstrated its assertiveness in the premium segment in March 2023 through aggressive postpaid plans and fiber pricing. We believe this development will negatively impact both Bharti Airtel and IDEA, as it signifies the return of disruption and tariff aggression at the base of the pyramid, while signaling a lack of support for 4G tariff actions," explained JP Morgan in its report.
"With this phone, Jio can seize market share in the lower segment, posing a risk to Bharti Airtel due to potential churn resulting from the recent 2G price adjustment, where the Rs 99 plan was increased to Rs 155," the JP Morgan report further stated. The report also highlighted Jio's aggressive approach towards the lower end of the spectrum, as demonstrated by its launch event for the phone, following its assertiveness in capturing premium subscribers earlier this year. JP Morgan predicts that these recent announcements will have negative implications for both competitors, Bharti Airtel and Vodafone Idea.
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