Indian telco Reliance Jio is expected to launch its custom 5G smartphone in the range of $100-$150 (Rs 8000 to Rs 12000) once its 5G coverage is wide enough to attract the broader base of mass market 4G users, says Counterpoint Research.
Jio is already using its budget-friendly 4G smartphone, Jio Phone Next, to build up that 4G user base by attracting millions of 2G feature phone users. Jio essentially hopes to use the same strategy to migrate 4G users to 5G.
“The two-prong strategy will be key to Jio’s growth and extend its leadership in the 5G era as well,” Counterpoint analysts said in a research note.
Looking ahead to 5G mmWave phones
Jio will be compelled to launch an affordable 5G mmWave + sub-6GHz smartphone in 2024, Counterpoint added. This is because the cost deltas between the two have narrowed significantly in terms of overall BoM (bills of material).
Jio is working with Google to develop its 5G smartphone (as it did with Jio Phone Next). The telco may extend the partnership to develop an affordable 5G mmWave smartphone going forward.
5G smartphones are currently priced at around $160 in the open market through various Chinese companies. India’s homegrown handset maker Lava International said that it will soon launch a sub-$120 5G smartphone to quickly grow its market share and compete more strongly with Chinese rivals.
Jio vs Airtel
Jio says it has adopted the standalone architecture (SA) for its 5G service, terming it as “True 5G”. That’s to differentiate itself from Bharti Airtel’s non-standalone architecture (NSA) 5G. Airtel has said its NSA 5G offering has the advantage of a broader existing handset ecosystem.
Both telcos will launch initial commercial 5G services in select metro cities next month around the Diwali festival.
Jio recently purchased 24,740 MHz of 5G spectrum across the 700-MHz, 800-MHz, 1800-MHz, 3300-MHz and 26-GHz bands, shelling out Rs 88, 078 crore ($10.87 billion). Airtel picked up 19,867 MHz of spectrum across the 900-MHz, 1800-MHz, 2100-MHz, 3300-MHz, and 26-GHz bands for Rs 43,084 crore ($5.32 billion).
Both telcos are unlikely to charge a premium initially for their 5G services.However, they may opt for tariff hikes later to monetize their 5G-related investments.