India's Reliance Jio bets on JioPhone Next to lure 2G subscribers

The long-awaited cheap 4G smartphone, JioPhone Next, a collaboration between Reliance Jio with internet giant Google, will be available from Diwali. IT will cost INR6,499 ($87) or an upfront payment of INR1,999 ($26.7), with the rest spread over 18 to 24 monthly installments.

Jio phone Next will run on the Pragati operating system, an optimized version of Android, and Qualcomm chipsets. The smartphone was scheduled to be launched in September 2021 but was delayed because of the ongoing chip shortage.

Figure 1: New shiny: Shop owner displays the JioPhone Next during a media preview inside his mobile phone shop in Ahmedabad, India
(Source: REUTERS / Alamy Stock Photo)

"The JioPhone Next is an affordable smartphone designed for India, inspired by the belief that everyone in India should benefit from the opportunities the internet creates. To build it, our teams had to work together to solve complex engineering and design challenges," says Sundar Pichai, chief executive officer, Google and Alphabet, in the press release.

Carrot not stick

The basic premise behind the JioPhone Next is to make it easier for the 300 million feature phone users in India to upgrade to 4G. The high cost of smartphones is one of the biggest hurdles for 2G users in India. Being India's only pure-play 4G service provider, Reliance Jio hopes that JioPhone Next will help it to attract low-ARPU users to its network.

Reliance Jio initially launched JioPhone in 2017 to attract 2G users to its 4G network. This helped it draw around 100 million new users to its 4G network. JioPhone just asked for an initial deposit of INR1,500 ($23), which could be claimed back after three years, making the device virtually free.

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However, the pricing of the Next is not as disruptive as JioPhone. Jio typically offers massive subsidies on devices, and this doesn't reflect the aggressive pricing it is known for.

Moreover, the competition is not too far behind. Airtel recently started offering cashback of as much as INR6000 ($80) on smartphones priced INR12,000 ($160) to defend its 2G customer base. This cashback is available for various smartphones, offering variety to consumers, unlike the JioPhone Next offer.

Jio has been campaigning for 2G-mukt Bharat (2G free India). It remains to be seen whether JioPhone Next will help them succeed in this endeavour.

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— Gagandeep Kaur, contributing editor, special to Light Reading