Incumbent telcos like Airtel, Vodafone and Idea Cellular are likely to counter JioPhone proposition by tying up with handset vendors to bring to the market their versions of the VoLTE feature phone, a JP Morgan report said. The report added that the new product to counter Jio is more likely to hit the market once these telcos have a threshold VoLTE network up and running.
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Delay in VoLTE launch by top telcos would give Reliance Jio a head-start of 9-12 months with the JioPhone, the brokerage said.
“It is only fair to expect some challenge for RJio as unlike the battles saw so far between RJio and the incumbents which were fought on the ARPU/pricing plane, this one will be fought on the product front,” JP Morgan said. “To the extent that RJio’s challenges to achieving product acceptability for the JioPhone at current terms are non-trivial, we see more benign implications for the incumbents.”
“We think the stakes could actually be higher for the OEMs (that are not engaged with RJio), who would not want to left out of this new phone segment as their existing bread-and-butter feature phone business comes under threat. So, incumbents may be actually able to exercise leverage over the OEMs in the coming months,” JP Morgan said.
JP Morgan, however, said that the 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. “Based on information provided by RJio and feedback from various sources, we believe there could be some challenges in propagating the JioPhone (as the terms & conditions currently stand)…Some of the challenges relate to feasibility, while others relate to the product being attractive and attractively-priced enough to induce habit-changing consumption,” it added.
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