In a first, Reliance Jio eyeing network-locked smartphones in India with low prices

The move from Jio is also to keep its existing feature phones inside its own network and upgrade them to 4G.

In yet another bid to expand its already-expanding userbase, telecom major Reliance Jio is eyeing a tie-up with Chinese smartphone brand Vivo to offer Jio Exclusive 4G smartphones. Phones offered under this program will, in the future, offer discounts, OTT subscriptions, shopping benefits and one-time screen replacement, at the expense of being locked with Reliance Jio’s network, ET reported. Reliance Jio is adopting a strategy similar to carriers in the US where smartphones are offered similarly with locked networks and significant price discounts and flexible EMI options. In fact, it is the first to be reportedly testing this model in India. 

Now, Vivo hasn’t confirmed any of these reports at the moment, but leaks suggested that the Vivo Y1s will be one of the very first phones to be offered under this new program. Potential buyers will get the choice to lock their phone and get the above-mentioned benefits with the Jio network. The handset is reportedly expected to launch in December with a Rs 8,000 price tag. The move from Jio is also to keep its existing feature phones inside its own network and upgrade them to 4G. India has around 350 million feature phone users and converting part of this user base to 4G can be of huge benefit to the Mukesh Ambani-owned telecom operator. 

“The handset bundling and the related handset subsidies and other benefits are geared towards increasing Jio’s share of gross adds to the market and, more importantly, retaining existing Jio 4G feature phone users whose contracts are coming up for expiry in the coming months,” Ashwinder Sethi, Principal at Analysys Mason, told ET

Jio is also in talks with local manufacturers like Karbonn, Lava, and some of the other Chinese smartphone brands to offer similar deals. Also, this isn’t a new move from the company as it earlier inked a deal with iTel, a Chinese smartphone maker to launch 4G smartphones in India ranging at Rs 3,000- 4,000. However, these phones are yet to hit the market. Jio’s subscriber additions fell sharply behind Airtel’s in the July-September quarter.

What is even more interesting is that Bharti Airtel is also exploring similar options with Lava and Karbonn to develop and sell low cost 4G smartphones under the carrier subsidy model. According to industry analysts, these carrier-locked phones are becoming a necessity in India for telecom operators because a very small number of subscribers switch between operators due to similar quality of service. Moreover, unlike before, there are no roaming charges either, hence customer lock-in has gained huge importance.    

Previous reports suggested that Reliance has also been working with Google for a new 5G Android phone, however, not much has been seen on that report recently.

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