JioBharat launch to create challenges for other telcos: Deven Choksey

Reliance Jio has announced that JioBharat is launched with the aim of transitioning the existing 250 million feature phone users in India out of the 2G era.

There is a good possibility that Bharti Airtel and VI customers might shift to Reliance Jio on account of the cheaper monthly plans, said Deven Choksey, promoter of KR Choksey Finserv, in an interview with Moneycontrol.

Reliance Jio on July 3 launched the cheapest 4G-enabled smartphone, JioBharat, at a price of Rs 999.

Apart from providing data and calling services, Reliance Jio is also providing services like JioSaavan, the music application and JioTV, said Choksey. “A user is not just shifting to a phone (JioBharat smartphone), he is shifting to the services,” he observed. The basic recharge plan for JioBharat smartphone has been priced at Rs 123 per month for unlimited voice calls and 14 GB data, which is 25 percent cheaper as compared to other operators.

Also Read: JioBharat Phone: Priced at Rs 999; all about its features and tariff plans

Choksey said that it would be challenging for other operators to get in line with Reliance Jio as they have not invested in an ecosystem at the lower-end range of smartphones. JioBharat’s launch will create challenges for other telcom operators as they have not invested in manufacturing smartphones and building operating systems like JioBharat.

The KR Choksey Finserv promoter further said that Bharti Airtel can be the closest competitor to Reliance Jio but the former will have to outsource all its requirements to compete with the latter's pricing plans.

Also Read: Reliance is India’s original disruptor: Suhel Seth on launch of ‘JioBharat’ phone

With the new phone launch, Reliance Jio is addressing a market of 40 crore feature phones which are due for purchases in FY23, said Choksey. Total income for the company including the new phone and monthly data plan sales is estimated to be around Rs 25,000 crore in FY23, said Choksey. He pointed out that this is about 25 percent of the current revenue for Reliance Jio.

Also Read: Reliance ups the ante with JioBharat phone launch, lowers digital divide

Choksey believes that Jio’s entertainment vertical, Jio TV, will benefit the most from the launch of the new smartphone as more users will have access to the platform. Another platform that will benefit from the launch of the new smartphone is the company’s e-commerce vertical. This is because Reliance Group already has its presence in e-commerce through Jio Mart.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.