Reliance Industries Likely To Spend More On JioPhone Next Subsidy

Reliance Industries, which is a parent company of Reliance Jio, might spend some money to make its upcoming smartphone pocket-friendly. The company might spend close to Rs. 3,750 crores on subsidies on the same. Notably, the telecom operator is planning to launch a smartphone near Diwali this year.

The JioPhone Next is expected to price under Rs. 4,000, but analysts said that smartphone makers are increasing prices due to global shortages of chipsets and other components.

"We reckon if RIL prices the JioPhone Next smartphone at around Rs 4,000 and looks to sell 75 million units, the subsidy element per handset could rise to around Rs. 2,500, or Rs 18,750 crore overall," an analyst was quoted by ET.

"This is due to a near 20 percent rise in component prices, particularly memory and LTE (4G) chipset costs, coupled with procurement delays and the continuing global shortage of semiconductors," he added.

Similarly, IIFL Securities believes that RIL is likely to subsidize the smartphone. The firm said that Reliance Jio is eyeing a 75 million unit target with Rs. 2,000 subsidy per unit. However, Reliance Jio has not issued any statement on the subsidy.

For the unaware, Reliance Jio recently extended the launch of the JioPhone Next, which has been developed under the partnership with telecom operator and Google. Earlier, the company was planning to bring the device on September 10, 2021, but now, the device will be available close to Diwali.

"Jio could also explore a 'buy now, pay later scheme to galvanize JioPhone Next sales, where the upfront sum could be kept low to attract value hunters with an option to pay the balance in easy, multiple instalments," another analyst said.

JioPhone Next Expected Specifications Details

Reliance Jio has recently said that advanced testing is going on and the device will be launch around Diwali. It is important to note that Reliance Jio is targeting all feature phone users from Airtel and Vodafone-Idea, which are close to 300 million.

In addition, Reliance Jio wants 2G free India. In addition, Reliance Jio wants to subscriber base to 500 million from the 441 million users.