JioPhone offers good value for money: Analysts

NEW DELHI: Reliance's JioPhone could lead to another round of revenue and margin pressure for carriers, analysts at Credit Suisse have said, while those at Morgan Stanley have termed it as a "good value phone" that can have several use cases in the rural markets.

In their first impression of the VoLTE feature phone from Mukesh Ambani-led Reliance Jio Infocomm, both global brokerages said the Rs 1,500 device offers decent value for money, highlighting the minimal buffering of live streaming of TV content on the phone and good-quality casting of content onto television.

While they pointed out the absence of YouTube and Facebook apps and NFC enablement, they were divided on the language support for voice assist feature - Credit Suisse said the feature supports all 22 Indian languages, but Morgan Stanley held that only Hindi and English were supported.

"Overall, the feature phone coming after reasonable success of the smartphone launch and with good specs for the phone itself should lead to another round of revenue and margin pressure for telcos," said Sunil Tirumalai, research analyst at Credit Suisse.

The 4G feature phone, which has started coming into the hands of consumers, is expected to be the next big disruptor in the telecom industry, which, for the past four quarters, has been engulfed in a brutal tariff war that has eroded revenues and profits of older players.

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Reliance Jio had 129 million 4G smartphone users on its network at the end of August, which is about 80% penetration in the existing 4G handset market, said Morgan Stanley analysts. "Jio believes that of the nearly 500 million existing unique feature phone users in the country, over 50% of them pay monthly tariffs of Rs 150-200, and are the target market for JioPhone," they said.

Relaince Jio, the latest entrant in India's telecom sector, aims to complete the delivery of its 6 million JioPhones by Diwali. Jio had said last month it aims to deliver 100-150 million phones in the next six months (five million a week), but sources close to the firm had then said it was bracing for competition from other feature phone makers as well.

For instance Micromax, which has tied up with BSNL for launching an entry-level 4G VoLTE feature phone, Bharat One, in the first week of October at about Rs 2,000, will join the race for a share of the segment of basic phones created by JioPhone.