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Why is Reliance Jio experimenting with device bundling when it’s proven to be not as effective?

The company is adopting an offline handset retail strategy despite it being a risky proposition.

Reliance Jio is offering its services through an array of devices in collaboration with offline retail stores in Delhi and Mumbai, according to a report in the Economic Times. Retailers informed ET that Reliance has installed “Jio Mini point” POS (Point of Sale) devices through which they can issue devices locked with Jio SIM cards. ET said that it signals an adjustment in the Mukesh Ambani-led company’s handset retail strategy as it prepares for the launch of JioPhone Next. Only retailers with Mini POS devices will be able to offer phones locked with Jio which also carry discounts and other services. The report explains that Reliance's retail strategy is to help the telco meet its target of 500 million users. It had 436.7 million users in June.  Device bundling in India has always been a risky proposition.  Gopal Vittal, CEO, Bharti Airtel had said in an earnings call last year that the cost of distributing devices through a telco network is very high. He explained that the scheme never got off the ground because it was expensive on the telecom company's bottom line and imposed a burden on the supply chain. He also revealed that telcos in other parts of the world were struggling to maintain margins while subsidising phones. It remains to be seen whether Jio is able to navigate the choppy waters of device bundling.  Jio’s partnerships with other manufacturers In addition to offline retailers, the telecom operator is offering smartphones locked with its SIM cards under its Jio exclusive…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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