After disrupting India’s telecom market with a $21 4G feature phone, Mukesh Ambani-led Reliance Jio is now preparing to unleash another disruption with its $35-$40 5G smartphone, aimed at getting 200-300 new subscribers to take its overall base to 600-700 million in coming years.
The Mukesh Ambani-led telco, which has also claimed to have developed its own end-to-end 5G network stack, is expected to subsidise the price of its 5G smartphone in India. Currently, 5G smartphones are available at a starting price of $340 in the country.
Jio is aiming to make India ‘2G-mukt’ or free of 2G technology by helping India’s 350 million 2G-based feature phone users to 4G smartphones. Ambani recently emphasised on the need to accelerate migration of 350 million 2G feature phone users to an affordable smartphone.
Jio was the first telecom operator to offer its 4G feature phone, Jio Phone, for free effectively. The telco, however, takes a three-year interest-free refundable deposit of Rs 1,500 or $21.
“Jio wants to bring the device for less than Rs 5,000 ($68) When we scale up the sales, it can be priced in the range of Rs 2,500-3,000 ($35-$40),” a company official was quoted as saying by the national news wire service PTI. It is however unclear if the latest Jio 5G phone will be developed under its deal with internet major Google.
In July, Jio entered into a commercial partnership with Google to develop entry-level or low-cost 4G and 5G smartphones for its subscribers in India. The partnership is a part of Google’s proposed investment of $4.5 billion in Jio Platforms for a 7.73% stake.
Under the partnership, Google will provide optimizations to its Android operating system and the Play Store for Jio smartphones that will be launched later this year.
“We believe we can design an entry-level 4G… or even 5G smartphone for a fraction of its current cost. To power such a value-engineered smartphone, we also need an equally value-engineered operating system… and such an operating system must be designed from the ground-up,” Ambani had said in July.
Media reports said that Jio will launch its 4G smartphones first, and is planning to place orders for 10 million units initially after it gets regulatory approvals for its Google partnership.
The development of Jio’s 4G and 5G smartphone was delayed due to the ongoing supply chain issues in the market. It is likely that Jio’s 4G smartphone will hit the market early next year.
In the meantime, Jio is finalising partnerships with local and Chinese handset makers to launch subsidised smartphones bundled with 4G data, voice, and Jio content services.
To rival Jio, Bharti Airtel is also in talks with contract manufacturers, including home-bred companies to sell cheaper smartphones under their own brand or through locked carrier bundling. The Sunil Mittal-led telco’s new strategy is aimed at protecting its existing 2G user base and helping them migrate its 2G subscribers to the 4G network.
India has already deferred 5G spectrum auction to sometime in 2021 due to the financial health of Vodafone Idea and Bharti Airtel, and an underdeveloped local ecosystem around the 5G technology. India has earmarked spectrum in the 3,300-3,600 MHz band or the mid-band for the next-generation 5G service.