Jio is currently also in talks with local players like Lava, Karbonn and other Chinese brands for similar partnerships, XXX PERSONS familiar with the matter told ET. It is aiming to bring smartphones priced about Rs 8,000 or lower.
ET previously reported that Jio inked a partnership with China’s iTel brand to launch 4G smartphones in the Rs 3,000-4,000 range. The bundled phones have yet to hit the market.
Analysts said the latest move could help Jio increase its share of gross subscriber additions in the market. India’s about 350 million feature phone users present a massive opportunity for Jio.
“The handset bundling and the related handset subsidies and other benefits is geared towards increasing Jio’s share of gross adds to the market and, more importantly, retaining existing Jio 4G feature phone users whose contracts are coming up for expiry in the coming months,” Ashwinder Sethi, principal at Analysys Mason, told ET.
Jio’s subscriber additions fell sharply behind Airtel’s in the July-September quarter.
As per industry estimates, 20-25 million 4G feature phone users are coming for renewal in the next six months and it will be important for Jio to retain these customers.
Jio and Vivo did not respond to ET’s request for comment.
Bharti Airtel is also believed to be talking to handset vendors like Lava and Karbonn to develop and sell low cost 4G smartphones under the carrier subsidy model. Airtel officially has said it is exploring its device options.
“These partnerships are now inevitable as the entire value chain has to come together to work on expanding the smartphone base. For some years now, we see 80% of the market primarily driven by replacement and upgrades. This is an unavoidable trend for 2021. No player alone can expand the smartphone base anymore,” Faisal Kawoosa, founder analyst at TechArch said.
Kawoosa said that telcos’ networks are almost the same in terms of footprint and quality, hence a very small number of subscribers switch between operators. “Also, there are no roaming charges, so a subscriber can stick to the same operator even if she switches to another state/circle. Reverse bundling or customer lock-in can succeed now,” he added.