Reliance Jio, owned by Mukesh Ambani, on Friday unleashed a 4G feature phone at virtually zero cost to tap into the country’s 500 million feature phone market. The announcement was made during the Reliance Industries Annual General Meeting (AGM) in Mumbai on Friday and is expected to disrupt the mobile handset market. Reliance has set its eyes on 100 million users through the launch of this 4G feature phone, according to analysts tracking the sector.

JioPhone will be available for pre-booking from August 24 this year. Users will have to put down Rs 1,500 as fully refundable security deposit, which will be returned in three years, to access free voice calls and unlimited data at Rs 153 a month.

To capture small ticket users, two sachets — a weekly plan for Rs 54 and a two-day plan for Rs 24 – will also be available. “We are targeting at adding 5 million JioPhones a week,” Mukesh Ambani said at the launch.

Data is capped at 0.5 GB per day on a Rs 153 pack. Users will be able to videos as well as live TV and YouTube, which will push the data usage. The phone will support 22 Indian languages, and will have a voice assistant as well as a distress button.

There are over one billion mobile users in the country, half of which use 2G feature phones for just voice calls and sending messages. But, these are low ARPU (average revenue per user) customers.

From the last quarter of 2017, all JioPhones will be made in India, thereby making 2G phones “obsolete”. Its 4G data coverage will exceed the country’s 2G network in the next 12 months, covering 99 per cent of India’s population.

“The low priced sachet plans will increase affordability of phone services, and could prove to be disruptive, leading to other telco operators being forced to float similar plans,” Bank of America Merill Lynch said in a note on Friday.

However, the note says it doesn’t see Jio being able to penetrate the mass market as the monthly price of Rs 153 and Rs 1,500 initial deposit as still being steep for the low income consumers.

PROS

The JioPhone’s price is Rs 0. You can buy the phone at Rs 1500, which will be refunded after 3 years.

JioPhone users will have to pay just

Rs 153 a month, including the cost of the phone.

The JioPhone will always have

free voice calls. From August 15,

the JioPhone will come with free unlimited data.

CONS

Does not support WhatsApp

‘Unlimited’ night usage is only from 2am to 5am

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