Reliance Jio, a subsidiary of Reliance Industries Limited led by Mukesh Ambani is all set to revolutionize the Indian telecom industry, again, by launching 4G enabled devices for as low as $30 according to a news report from Economic Times. The company is already in discussion with various different Chinese manufacturers including Xiaomi, Gionee, and Huawei who are looking forward to capturing the currently booming Smartphone Industry of India.
The price is relatively low compared to the current trend in the market where budget phones offered by Xiaomi, Motorola, and Huawei priced around $100 have conquered the budget Smartphone market by selling exclusively online tying up with FlipKart. Among these brands, only Xiaomi Redmi 2 priced at Rs. 6,999 and Moto E (2nd Gen) priced at Rs. 7,999, available on Flipkart, are 4G enabled devices. This makes Redmi 2 from Xiaomi, the cheapest 4G enabled Smartphone in the country.
Taking a cue from this fact, if Reliance manages to introduce a 4G enabled smartphone for as low as $30, it is sure to revolutionize the whole mobile phone industry. Although Redmi 2 is currently the cheapest 4G enabled device in the market, its best feature is limited to a few locations in India as 4G network is not yet explored across the country. Bharti Airtel, being the 1st telecom company to introduce 4G network in India offers its services only in few major cities of the country whereas Aircel which launched its 4G service in July 2014 is available only in 4 circles including Andhra Pradesh, Assam, Bihar and Odisha.
Challenges for Reliance Jio 4G Plan:
The road to the mission initiated by Reliance Jio will be full of hurdles and challenges along the way. Every aspect of their strategic planning should click at the same time to repeat the success Reliance achieved when they entered the telecom industry for the first time.
Challenge #1 – Finding an OEM
The first challenge that Reliance Jio would face is to find an OEM which would help manufacturing a $30 4G enabled phone. However, it wouldn’t be difficult for India’s No.1 private sector company to sign a deal with emerging Smartphone brands to help them build their vision of introducing 4G enabled devices for as low as $30. Over a decade ago by launching a cellphone for just Rs. 500, Reliance successfully revolutionized the mobile phone market when it was only a distant dream for the majority of the indian population to own a mobile phone. This event actually triggered the mobile phone revolution in the country which continues even today led by the Smartphones Industry.
Challenge #2 – Spreading 4G Network across India
Launching a 4G Smartphone at $30 would be an instant sellout but here’s where the second and even bigger challenge comes in. Consumers wouldn’t hesitate to spend $30 or even few bucks more for a device enabled with advanced LTE technology but the big question here is if there’s enough distribution of 4G network in the country. It is not a rocket science to understand the fact that Reliance Jio wouldn’t make any profit from the number of sales but it is eyeing to target the 4G data usage as the major earning source for the company by introducing a relatively cheaper 4G Smartphone. Reliance Jio needs to spread 4G service all over the country so maximum number of users can use it. However, considering that Reliance have announced to reach 800 cities April and June this year, this doesn’t look much of an issue – if Reliance manages to meet the deadline.
Challenge #3 – Encourage Consumers to use 4G
Just providing the service won’t be enough. In order to encourage users to try 4G, Reliance Jio will have to review the current 3G and 2G plans in order to set the right packages for 4G. Users buying a 4G device for as low as $30 are not someone who could pay a lump sum amount every month on 4G. The data plans on 4G should be feasible for the consumers in such a way that they happily jump from 3G or 2G data plans to the whole new 4G plans.
Where does Reliance stand today?
Reliance Jio is already working with a mission of spreading 4G across the country since the past 5 years by investing a whopping $13 billion. Although, Bharti Airtel and Aircel have already started offering 4G service in the country, their reach is quite limited in terms of the cities covered. On the other hand, Reliance opted to wait in order to build the much-needed infrastructure all over India during the last 5 years and as a result, it is up and ready today to launch its 4G services in 800 cities across India.
Reliance is planning to hit the bull’s eye again this time with a target set for 5 million customers in 50 hours according to a reliable but anonymous resource as per Economic Times. According to a 2013 report, Reliance disclosed its plans to provide 4G service at the rate of Rs. 10 offering 1GB download which is much cheaper than what we pay for 3G service today. Although it seems impossible to cut the rate down to Rs. 10 per 1GB download, Reliance is well-known for slashing the prices down by a huge margin to compete directly with 4G providers.
Reliance will also try to attract more subscribers for its 4G services through its dongle and mi-fi devices. Mi-fi devices will allow non-4G Smartphone models use 4G service using Wi-Fi. In short, Reliance is all set to go for the kill right from the start as soon as it starts offering 4G services.
Will it repeat the success that Reliance achieved when it entered in the mobile phone market a decade ago or not? Only time will tell.