Reliance Jio has devised a plan to ensure that its upcoming 4G smartphone, JioPhone Next, is positioned properly to target low-end 2G or feature phone users in India. The telecom operator is aiming to sell 50 million JioPhone Next smartphones in the next six months.
The Mukesh Ambani-led, 4G telecom operator has reportedly partnered with five banks and four non-banking financial companies (NBFC) to bring financing schemes for the JioPhone Next, which the telco developed in partnership with internet major Google.
“The phone will be priced intelligently. Consumers will be able to pay just 10% cost upfront to buy the device while major banks will finance the remaining amount,” ETNow news channel reported on Monday citing company sources. “Jio has set internal targets with distributors and financiers for sales.”
As per the news channel, Jio has joined hands with State Bank of India (SBI), Piramal Capital, and IDFC First Assure and Non-Banking Financial Companies (NBFCs) to make Rs 15,000 crore ($2.03 billion) worth of credit support to customers.
As per various media reports, the JioPhone Next could be priced between $50-$70.
Jio had earlier this month placed an initial production order for the JioPhone Next 4G smartphone to home-bred contract manufacturer UTL Neolyncs, which is a joint venture between Bengaluru-based UTL Group and Neolync Solutions.
UTL Neolyncs was earlier approved to receive sops under the production-linked incentive (PLI) scheme for handsets. Notably, Jio’s sister company, Reliance Strategic Business Ventures Ltd, invested Rs 20 crore ($2.7 million) in Neolync Solutions earlier this month.
Jio’s latest smartphone will come bundled with various Jio and Google digital services. Analysts said that besides attracting 2G users to its 4G network, Jio wants more users to use its digital content services for monetisation purposes.
Jio is trying to attract 2G users and is also trying hard to poach smartphone users from rival telecom operators like Airtel and Vodafone Idea. It has already signed reverse handset bundling partnerships with device manufacturers like Vivo, Xiaomi, Samsung, Oppo, HMD Global and iTel, among others, to roll out ‘Jio exclusive’ or ‘Jio-SIM locked’ smartphones.
‘Jio exclusive’ smartphones imply locked with a Jio SIM card and Jio bundled apps in partnerships with device manufacturers. These smartphones would come with price support from Jio, along with no-cost EMI of up to 6 months and additional benefits worth Rs7,000-10,000 ($95-$136), as per a report by the Economic Times.
“We think the move is likely to help Jio acquire mid-segment users (along with low-end users targeted with ‘JioPhone Next’), enabling expansion of high-ARPU subscriber base as well as get more users for its digital apps,” brokerage UBS said in its analysis note on Monday.
The company has also devised a retail strategy for Jio Exclusive bundled smartphones and its own JioPhone Next. It is a partnership with offline retailers and equipping them with a Jio mini point of sale (PoS) device to activate a smartphone under the ‘Jio Exclusive’ program.
“We think the strategy is aimed at increasing market reach, as Jio seeks to incentivize the 300 million 2G subscribers of other telcos and the existing JioPhone users to upgrade to ‘JioPhone Next’. Furthermore, the PoS devices would extend new commerce reach to telecom retailers as well,” UBS said. “However, the device subsidy (as per our calculations) which was earlier limited to the JioPhone would now be extended to other smartphones, raising customer acquisition cost.”
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