NEW DELHI: Reliance Industries is preparing to launch feature phones with 4G capability, creating a new category of mobile devices in India in a bid to attract millions of users to its telecom venture Reliance Jio Infocomm. These devices could be priced as low as about Rs 1,000 and will come bundled with unlimited voice and video calling, besides digital content, people familiar with the plans said.
The Mukesh Ambani-owned company will offer the feature phones with voice over LTE (VoLTE) technology, seeking to win over customers from the rural and tier-III markets who use phones mainly to make calls.
“Jio wants to tap all the segments in the country and sees huge potential in the rural areas, which it now aims to tap with VoLTE feature phones,” one of the people said, adding that the new devices will be aimed at first-time data users. “The 2G feature phone is still a big market in India.”
About 65% of India’s more than 1 billion mobile phone subscribers still use feature phones. Affordability — the cheapest 4G smartphones cost about Rs 3,000 — and lack of scope for other uses have deterred the faster adoption of smartphones.
Jio, the only telco in India that offers VoLTE to make calls, has added over 25 million users since starting services on September 5 and is targetting 100 million in the shortest time, equivalent to about 38% of market leader Bharti Airtel’s 260 million subscribers in the country.
For that, tapping customers who use feature phones is essential, say experts. Currently, VoLTE is offered only on smartphones.
Reliance is developing two feature phones priced at about Rs 1,000 and Rs 1,500 that are likely be launched during January-March, another person said, asking not to be identified. The devices will function just like smartphones and will include the use of data to access the Internet and make calls — the only thing missing will be the touchscreen.
“If Jio launches VoLTE feature phones at Rs 1,000, it can potentially shake up the market because the target audience in that segment may prefer to choose phones with free calling inbuilt,” said Navkendar Singh, a senior research manager with International Data Corp.
The 4G telco is working with domestic handset maker Lava International and Chinese original equipment makers to manufacture these feature phones. Jio is said to be subsidising part of the selling price to make the 4G feature phones available at about Rs 1,000 (about $15). The cost of making the phones is about $25 and they are usually sold for about Rs 2,500.
The initial batch of feature phones could have branding from both Jio and Lava and will be sold through their respective retail channels to reach a wider market, the people said.
RIL didn’t respond to emailed queries while Lava declined to comment on specifics.
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