JioPhone delivery started earlier this week all over the country. The company is aiming to deliver 6 million units of the device within mid-October.
It is known that the JioPhone will be essentially free as the security deposit of Rs. 1,500 will be refunded to them once they return the device after three years. Now, a report from Reuters tips that the JioPhone actually costs around Rs. 2,500 to assemble, which is relatively higher than the deposit that the buyers have to pay for it. The handset receives a subsidy of 40% that takes its cost down to Rs. 1,500. This state that the company is actually risking the recovery of its investments in an attempt to garner millions of customers.
The report also reveals that Jio is aiming to build a subscriber base of 250 million to 300 million users in two years. The JioPhone is the attempt to tap into the feature phone market with over 500 million users in the country.
According to the report, the feature phone users have an average revenue per user (ARPU) of Rs. 50 or lower. The JioPhone is aiming to increase this with the Rs. 153 monthly plan. With the 4G feature phone, Reliance is making a bold attempt with the device and the data will be the key selling point for them.
Also read: How to pre-book a JioPhone online
The report further states that the JioPhone is being manufactured in China for now and that Reliance is in plans to rope in Flextronics and Foxconn that have manufacturing facilities in India to assemble the device. The most expensive component of the JioPhone is the Qualcomm and Spreadtrum chipset and the battery are said to cost $3 to $4.