Competition For Reliance Jio? Leading Operators Plan 4G Smartphone For Rs 500

| February 8 , 2018 , 15:12 IST

Reliance shook the telecom industry by introducing its 'Jio' services at astoundingly low prices, with an initial offering of free data, resulting in other telecom majors scrambling to keep up with the Jio 'wave'.

After Reliance announced its 4G feature phones 'JioPhone' at remarkably low prices, Bharti Airtel, Vodafone India and Idea Cellular are now reportedly working with handset companies on 4G smartphones that would be drastically cheaper than feature phones, maybe even as low as Rs 500 per phone. Along with the low-priced 4G smartphones, bundled packages of voice and data plans may be offered for as low as Rs 60-70 a month.

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Low-cost smartphones with low-priced data and voice packs may hamper the average revenue per user (APRU) in the short term, however, the telcos are hopeful that they would be able to retain their users and upgrade them to smartphones with increased data consumption in long-term, reported The Economic Times.

"We will gear towards low-cost smartphones via alliances. Smartphones are expected to become cheaper, so for an offering with them, it makes more sense than setting up our own phones," said a telecom executive to ET, adding that they won't subsidise phones the way Jio has.

Meanwhile, the three carriers are reportedly already collaborating with handset makers, offering bundled data and voice with cashbacks on phones priced under Rs 1,500, which is also the upfront cost of the Reliance JioPhone, refundable after 3 years.

Generally, feature or basic phone subscribers use 2G voice services and account for 65-70 percent of India's billion-plus subscriber base, contributing 50 percent of the telecom sector's revenue.