In India, the newest wireless provider Reliance Jio is going after the 250 million people who are still using 2G wireless services in the country. Over the weekend, it announced its new Jio Bharat phone platform, which can update existing feature phones to become internet enabled. Jio is offering the new Jio Bharat phone service for the incredibly low price of $12.18 (INR999) per month. The service will run on its 4G network.
In its announcement, Jio stated, “While India is leading the 5G revolution on one side with the transformational Jio True 5G network, there is a section of society that is unable to reap the benefits of digital technology in entirety. India still has 250 million mobile subscribers trapped in the 2G era with feature phones.”
These feature phones do not provide access to the internet. But the Jio Bharat platform can enable data capability on these entry-level phones.
In addition, the operator is working with other phone brands, starting with Karbonn, to build new Jio Bharat phones.
The company is beginning a beta trial July 7 for the first 1 million Jio Bharat phones. The beta trial will test scalability of the platform and processes for upgrading millions of feature phones.
The low price of $12.18 per month is sure to frighten the country’s other big mobile operators — Vodafone Idea, Bharti Airtel and BSNL.
Jio claims the price of its Jio Bharat service is 30% cheaper and provides seven times more data compared to feature phone offerings from the other operators. And it claims the other operators have been increasing their prices for low-end users.
“This segment is most exploited by incumbent operators because users in this segment are unable to afford smartphones,” stated Jio.
Reliance Jio Chairman Akash Ambani stated, "Six years ago, when Jio was launched, we made it clear that Jio will leave no stone unturned to democratize internet and pass the benefits of technology to every Indian. Technology will no longer remain a privilege for a select few.”
New Street Research analyst Chris Hoare wrote, “Jio is effectively lowering the mobile prices on low-plans. In our view, Vodafone Idea and BSNL will be the most impacted as both operators have a much higher 2G subscriber mix relative to Bharti. We estimate that existing 2G subscriber mix is 33% for Bharti, 40% for Vodafone Idea and 50% for BSNL.”
He added that Jio’s move “is a material setback for Vodafone Idea and BSNL, both of which need prices to increase in the near term.”