JioPhone will be a strong competitor for feature phone players in India: Care Ratings

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According to Care Ratings, the launch of the 4G compatible phone with some smart features by Jio is primarily to gain subscriber base in the telecom services space.

JioPhone will be a strong competitor for feature phone players

" The introduction of this phone will help the company to increase its subscriber's base, issues of network coverage in very remote areas would be critical for the company to sustain its subscriber additions," the rating agency said.

"JioPhone is likely to make a dent in the market share of feature phone players, it is unlikely to have a significant impact on the smartphone market in the country," the agency added.

JioPhone is a 4G compatible phone with some smart features and supports VoLTE calls. While the phone is free, the user needs to pay Rs.1,500 as the security deposit, which would be refunded after 3 years upon returning the phone. The services like free voice calling, SMS, and unlimited data will be available to these mobile users at a minimum charge of Rs. 153 per month. "This is the next disruptive announcement from Reliance," the agency stated. .

Just to recall, Jio began its journey by offering free network services for almost six months. Today the company still offers data at very low price. And it looks like the company wants to gain more consumers in the market and has thus introduced the JioPhone.

While the offers from the company sounds interesting, we will have to wait and seen how this new mobile venture will hold up for Jio. And whether the company will be able to capitalize on the telecom as well as the mobile phone market share in India.

As on May 2017, Reliance Jio (which launched its services in September 2016) had a market share of 9.9 percent which represents subscriber base of 117.3 million users. The company now holds the fourth position in terms of subscriber base led by Airtel, Vodafone and Idea Cellular. Airtel leads with 23.6 percent of the total wireless subscriber base as on May 2017, while Vodafone and Idea Cellular had a share of 17.9 percent and 16.6 percent, respectively. The total wireless subscriber base was at 1,180.8 million as on May 2017.

After August 2016, the growth in subscriber additions has been primarily driven by Reliance Jio. Of the 151.9 million subscribers added during the period between September 2016 and May 2017, 117.3 subscribers were added by Reliance Jio, followed by Airtel, Idea, and Vodafone who added 21.1 million, 19.3 million and 10.8 million subscribers, respectively, while companies like Reliance Communications, Tata Teleservices saw erosion in their subscriber base.

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