Reliance Jio’s Rs 500 4G Phone to Target 150 Million Feature Phone Users in India: CLSA

Reliance Jio’s upcoming 4G feature phone will target 150 million feature phone users that are likely to have average revenue per user (ARPU) of Rs150-180 and contribute to 15-17% of industry revenues. These 150 million feature phone users and replacement market of feature phones at the margin would be the twin target markets for Jio’s 4G feature phone, according to a report by CLSA.

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In India, features phones still outsell smartphones with total feature phone shipments at 136 million vs. smartphone shipments of 113 million in FY17. “Our industry checks indicate that there are ~500m feature phone users in India mobile, however, 70% of these have ARPU of Rs. 50 monthly or lower,” CLSA said

Jio, which has just started charging for its services full-fledged, is currently seeing a moderation in subscriber additions as it hits the 4G device hurdle with penetration in 4G devices at 85%.

“Our channel checks indicate that a 4G feature phone launch by Jio is imminent and this phone though locked to the network will have VoLTE and suite of data applications. Despite being superior to currently available feature phones, there is a possibility that Jio could offer their feature phone at Rs500-1,000,” CLSA said in its note.

With the price of feature phones ranging between Rs. 500-2500, this potential offer from Jio will be aggressive and could likely lead to mass adoption. CLSA added that its channel checks also point to promotional tariffs bundled with a 4G feature phone.