According to the new report by Bank of America Merril Lynch, Jiophone has limited mass market as the monthly price of Rs 153 and Rs 1,500 initial deposit is still steep to target the lower income groups in a country.
"We do not see Jio being able to penetrate the mass market with the announced offer, as we see the monthly price of Rs153 and Rs1,500 initial deposit as still being steep for the low-income consumers."
The report said, we see the smaller telco names losing their "value proposition" of lower priced voice offering, which would lead to a faster market consolidation.
Meanwhile, a report by Deutsche Bank Market Research said that "JioPhone is based on a Firefox OS and all the apps for the phone will come from Jio's own store. Thus, it will provide a "walled garden" to its subscribers, which goes beyond the traditional connectivity.
We note that Jio already has an entire spectrum of apps spanning the social, content, payments verticals. Thus, JioPhone user will likely have a very low churn both due to the 'refund feature' and the software platform."
Jiophone will target 50 crores feature- phone users in the country and it will offer free voice calls and SMS to customers.
The new phone users will get similar benefits of Dhan Dhana Dhan offer (free voice/SMS and 1GB of data per day) at just Rs 153 per month.
In fact, they (users) can also subscribe to Jio Phone TV offer, under which users will be given a cord through which they can connect a phone to TVs to view content on the TV screen (supports all TVS, even CRT TVs will work).