Inside Jio’s new plan to poach 2G subscribers from Airtel, Vodafone Idea
NEW DELHI: Inside Jio’s new plan to poach 2G subscribers from Airtel, Vodafone Idea – A fierce fight is about to interrupt out among telcos for a few 350 million feature phone users, with Reliance Jio on the brink of finalizing partnerships with Indian and Chinese handset makers to launch subsidized SIM-locked smartphones bundled with 4G data, voice, and own content services, people conversant in the matter said. They added that telco has already inked its first such tie-up with China’s iTel brand for launching 4G smartphones likely within the Rs 3,000-4,000 range.
The launches—which will are available the initiate to the affordable 4G smartphones to be developed under the Jio-Google partnership—is aimed toward attracting a bulk of the roughly 350 million featurephone subscribers, most of whom are on the networks of rivals Bharti Airtel and Vodafone Idea, especially in semi-urban and rural areas, people conversant in the matter said.
As reported by ET in its September 12 edition, No. 2 carrier Airtel, with some 108 million 2G/3G users of its 280-million subscriber base, is additionally in talks with handset makers for similar subsidized SIM-locked phones within the Rs 2,000-2,500 range. Industry executives say Vodafone Idea, with the foremost number of 2G/3G users at a 138 million, may have little choice but to imitate with similar bundling tie-ups to guard its base. The cash strapped telco has already lost over 120 million users since the merger in August 2018, to finish the June quarter with under 280 million subscribers.
“While the iTel partnership is completed. Jio is additionally performing on forming similar partnerships with other Indian handset brands for low-end 4G smartphones. this is often a neighborhood of their 2G-mukt Bharat project,” a baron with an Indian handset brand told ET, on the condition of anonymity.
Jio and iTel didn’t answer ET’s queries.
“Airtel and Vodafone Idea have big 2G subscriber bases, which they might wish to maintain and gradually shift to 4G. If Jio pips them in launching lucrative 4G offerings, then it’ll be crucial for them to supply the same or a far better offer,” one among the people said.
Navkendar Singh, director of research at IDC India, said that Jio will need to work on total cost, which shouldn’t be quite Rs 2,500 after the subsidy, and will specialise in an end-to-end experience as merely subsidising the device won’t really yield results.
“In addition to bundling of knowledge and Jio’s own services, total cost of ownership must come down for patrons along side after sales support. The messaging has got to be fixed around use cases like education, payments and healthcare also ,” said Singh.
Tarun Pathak, associate director at Counterpoint Research, added that local handset makers and key feature phone players have a robust know-how of the device experience needed for this segment, and may take advantage by docking with telcos.
Another baron at an Indian handset brand, which acts as a contract manufacturer for other companies, said that Jio has also begun talks with Indian handset players and global contract manufacturers for a low-cost 4G smartphone—likely to be Jio-branded—to be developed in partnership with internet major Google.
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