JioPhone Ripple Effect: More companies plan 4G feature phone

More mobile phone companies are gearing up to launch affordable 4G feature phones by the year-end, anticipating a pickup in demand following Jio’s foray into space.
  • Lava has already launched a 4G phone and Intex has plans to launch a similar phone for ₹1,999 this month end.
  • In India, a large population still uses feature phones, which are primarily on 2G. With the arrival of Jio, which is a greenfield LTE only network, it is sensible for companies to launch 4G feature phone as there will be customers who are feature phone users but would like to use Reliance as their preferred choice of operator.
  • RIL Chairman and MD Mukesh Ambani recently launched JioPhone at a one-time fully refundable deposit of ₹1,500 per unit.
  • Indian Cellular Association National President Pankaj Mohindroo said there are about 450-500 million feature phone users in India with 130-140 million feature phones getting sold every year.
  • In urban centers, 2G is highly spectrum inefficient. This phenomenon (launch of 4G feature phones) will be good in the urban area, but ₹1,500 is very expensive to the bottom of the pyramid. The package (in a case of Jio) is very attractive, so people may want to experiment with it.
  • Besides 4G feature phone, some companies may launch 4G smartphones in low range.
Hit by the aggressive strategy of Reliance Jio and to counter the impact of JioPhone, Idea Cellular top officials, in its earnings call, had said the company is working with handset makers to bring down the cost of handsets.

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