Noting the lack of a 4G devices ecosystem in India, Reliance Jio plans to launch its own devices brand while making gadgets from other providers available to consumers through its retail network.
The company has revealed it is in talks with 28 domestic and international device manufacturers regarding the scheme, including Apple Inc. (Nasdaq: AAPL), Samsung Electronics Co. Ltd. (Korea: SEC), Micromax Informatics Ltd. , OnePlus, Huawei Technologies Co. Ltd. and Xiaomi. RJio is also engaged with chipset makers -- such as Qualcomm Inc. (Nasdaq: QCOM) and Intel Corp. (Nasdaq: INTC) -- to ensure that affordable and interoperable 4G devices are also made available.
Besides developing smartphones, RJio is also in discussions with OEMs about a "pocket router solution, which can seamlessly connect any 2G/3G smartphone to 4G services network."
Because RJio owns spectrum in the 2.3GHz, 1800MHz and 800MHz bands, it needs devices that can seamlessly move from one band to another.
In the meantime, it remains open to exploring other options such as spectrum sharing and trading once these are allowed by India's Department of Telecommunications .
RJio clearly hopes its own branded devices will fuel interest in its 4G service, but it also aims to become a retailer of 4G mobiles from a variety of makers. Indeed, Reliance Digital -- the in-house retail chain of RJio parent Reliance Industries Ltd. (RIL) -- has a key role to play in RJio's device strategy.
In India, devices are typically sold by OEMs while operators focus on services. But RJio is taking a different approach to its 4G business, which is likely to start offering services in December this year.
One important reason for its interest in becoming a device distributor is that RJio wants to ensure VoLTE is a default feature in all smartphones -- allowing it to offer voice services on its 4G network.
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Providing further details of its plans in an analyst presentation issued last week, RJio said it would make devices available across Reliance Digital outlets, including "entry level" as well as "ultra-premium" smartphones and tablets.
To support these activities, the company has plans to expand the number of cities in which Reliance Digital has stores -- including both "Express" and smaller "Express Mini" outlets -- from 180 today to about 800 by 2016.
However, some of the "Mini" outlets will be converted into Jio Centers that will preside over a distribution network of "connectivity" and "recharge" outlets. RJio plans to have 1,000 Jio Centers in place when it launches its 4G service, along with half a million connectivity outlets and another million recharge outlets. It will also be looking to take advantage of online channels for sales and distribution.
In many respects, RJio appears to be trying to emulate the strategy of China Mobile Ltd. (NYSE: CHL), the biggest mobile operator in China, which is mentioned several times in RJio's analyst presentation. "The device ecosystem [in China] has evolved significantly in the last one year with lowest price of less than $65 [per unit]," it says. Significantly, RJio plans to launch 4G devices at a similar per-unit price point of 4,000 Indian rupees ($62.3). (See RJio to Launch 4G in December.)
RJio also points out that "China went from nil to 84% smartphones being LTE in less than 18 months." The operator will be hoping to make a similar impact in India.
– Gagandeep Kaur, contributing editor, special to Light Reading