This may prove to be a huge challenge for Reliance JioPhone, claims JP Morgan

NEW DELHI: Billionaire Mukesh Ambani-owned Reliance Jio’s much touted JioPhone may not withstand consumer expectations and wouldn’t halt potential feature phone users’ plans to own a smartphone during a three-year lock-in period, a new JP Morgan report said.

“Some of the (JioPhone) challenges relate to feasibility, while others relate to the product being attractive and attractively-priced enough to induce habit-changing consumption,” the New York City-based brokerage said.

Reliance Jio announces new plans: All that has changed

With Dhan Dhana Dhan offer coming to an end, Reliance Jio has revamped its tariff plan for both pre-paid and post-paid users. Though the new plans still start at Rs 19, the data offered and validity of most plans has been increased. The daily FUP limit and other offers including free voice calling remain same for all plans. Here are Reliance Jio’s revamped plans for prepaid users:

Rs 309 plan: No. of days doubled along with data

Earlier valid for 28 days with 28GB data on offer, the Rs 309 plan’s validity has now gone up to 56 days and is now offering 56GB data. This means users get 56GB data for 56 days. Rest of the offerings including FUP limit remains same.

Rs 349 plan: No. of days doubled with data

The Rs 349 plans offers users 10GB + 10GB 4G data for 56 days (28 + 28). Post the exhaustion of 20GB in 56 days, the internet speed is reduced to 128kbps. There is, however, no cap on daily data usage in this plan.

Rs 399 plan: This is the original Dhan Dhana Dhan Plan

This plan offers 1GB data per day that is valid for 3 months (84 days). This plan is similar to the Dhan Dhana Dhan Plan that was announced by the company in April at Rs 309.

Rs 509 Plan: Double Days, double data

This plan is similar to the earlier offered plan at this price but comes doubles validity. The pack offers 2GB data per day (FUP limit) valid for 56 days.

Rs 999 Plan: More data, more number of days

While the old validity for this plan was 60 days, the new offer is now valid for 90 days with no daily FUP limit. However, once a user exhausts his 90GB quota, the internet speed is reduced to 128 kbps.

Rs 1,999 Plan: Validity goes up to 120 days

While originally this plan offered 125GB data with 90 days validity (roughly 1.38GB data per day), this plan is now valid for 120 days and offers 155GB data (1.29GB data per day).

Rs 4,999 Plan: Both data and validity goes up

The Rs 4,999 plan now offers users 380GB data as opposed to 350GB data with validity increased to 210 days from 180 days. Originally it came down to 1.94GB data per day and now it is 1.80GB data.

Rs 9,999 Plan: Slight increase in data and validity

Extending the validity from 360 days to 390 days, this plan now offers 780GB data as opposed to 750GB data keeping the per day data to average about 2GB.

Reliance Jio that forayed into commercial fourth generation or 4G technology-based services in September 2016, has launched JioPhone
some weeks back at a refundable Rs 1,500 security deposit for a lock-in period of three years to complement Jio services. The JioPhone is scheduled to hit the markets in September, while pre-bookings will start from August 24.

The US-based firm, however, was skeptical over Jio’s proposition to hold on subscribers with Rs 153 a month plan.

“In all likelihood, if the consumer can afford to pay at least Rs 153/month for three years (JioPhone ARPU pricing), s/he is quite likely a smartphone user well before this three-year period runs out,” it said in the report.

Smartphone penetration for Airtel and Idea have crossed 40% of their subscriber base even as a significant part of them are not broadband (3G/4G) users yet.

The finding points out that the low-end of this smartphone user base operates at clear sub-Rs 200 ARPU (Average Revenue Per User) and consumers would likely to consider the pros and cons of downtrading to JioPhone from a smartphone.

The firm also expects a challenge for Jio and it said that unlike the battles drawn between new comer and incumbent rivals over service pricing plane, the new one would be fought on the product front.

JP Morgan believes that the incumbents would counter JioPhone by tying up with original equipment manufacturers to bring to the market their versions of the VoLTE feature phones which it said would be more likely once they have a threshold VoLTE (Voice over LTE) network up and running.

Following the JioPhone launch by Reliance Industries chairman Mukesh Ambani, incumbent telcos are believed to be in discussions with handset vendors for bundling voice and data services with a competitively priced 4G VoLTE feature phones.

A recent Internet and Mobile Association of India (IAMAI) finding also warned that 4G smartphones priced below Rs 4,500 have poorer specifications.