While it's expected that India's major feature phone manufacturers, such as Micromax and Intex, will take a hit from the launch of the device, Reliance Jio is not really interested in starting a manufacturing business.
"The low-priced JioPhone will place pressure on Indian feature phone leaders such as Samsung, Intex and Lava, and make life harder for ambitious new entrants like HMD", said Neil Mawston, an executive director at tech research firm Strategy Analytics, to Reuters. In just a year's time, Jio has shaken up the telecom sector, resulting in massive losses for other telecom companies.
In the last week on Friday Reliance Jio 4G announced its budget featured phone Jio Phone. Buyers can get a device for a refundable fee of 1,500 rupees ($23.30).
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The next catch is that only new users can avail this offer and not the ones who are already using Vodafone India. This move is in line with Prime Minister Narendra Modi's plan to get India more digital. After the unveiling at the Reliance AGM, Qualcomm and Spreadtrum independently announced their chips are used in the first Jio-branded phone. "The uptake of VoLTE devices will depend on certification. we should be very much national in the coming 6-9 months", Gopal Vittal, Airtel's managing director and chief executive (India and South Asia), said during an earnings call. Reliance Jio is the only company in India which is providing 4G VoLTE services in many cities. So we believe that this (Jio Phone) could propel growth of cheaper phones in the market and that is something that we embrace.
But the industry will still face tough times for now, as Jio's deep pockets still squeeze rivals - and its suppliers. On some level, this is good news for Indian consumers, as bundled offers mean low-priced voice and data for all.
When Jio was launched in past year, it is only for LYF phone users, then it is shifted to all 4G phones. We don't see that as a surprise since the recent launch of JioPhone is aimed to connect 50 crore feature phone users in the country.
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The JioPhone will give them a first taste of high-speed web browsing and is likely to gradually boost online shopping in the world's fastest-growing internet services market, analysts said.
Apart from this there is one another plan also.
Bharti Airtel Ltd plans to take on Reliance Jio Infocomm Ltd by launching its own VoLTE (a 4G voice network) service by March 2018, and working with phone makers on new low-priced 4G feature phones, Gopal Vittal, chief executive and managing director of Airtel said during a call with analysts.
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