With Reliance Jio rolling out scheme of ‘free’ 4G feature phone, the rivals including Bharti Airtel, Vodafone India and Idea Cellular fear a major dent in their market share. However experts feel that Mukesh Ambani’s telecommunication company could win much market share with this freebie. Earlier Jio has grabbed up their market share by offering low cost data plans, which has affected the rival brands as well.
Experts also feel, in India, people from Tier 2 and Tier 3 markets where the free phone will have the maximum takers don’t tend to stick one operator for long. These aren’t loyal customers that a telco can depend upon.
As per the new scheme of free phone, Jio subscribers would need to pay Rs 1500 (fully refundable) and get a VoLTE feature phone. However the customer would need to stay signed on for 36 months to get a refund by returning the used 4G device.
Prashant Singhal, global telecom leader at EY, told The Economic Times that while the new device brings down the handset price barrier and is an innovative scheme, the target segment may not be able to afford the ARPU of Rs 153 a month. He said the target customer for Jio is currently spending about Rs 50-60 a month, so it will be a challenge for them to double that budget overnight.
