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On the importance of the Jio Bharat Launch

This is most likely to be an effort to cannibalise users from other mobile operators, like Airtel and Vi.

Reliance Jio has restarted the telecom pricing war by launching the Jio Bharat bundled phone (a device with an Internet connectivity offering), targeting that part of India’s Internet user base that is still on feature phones (and thus can’t really be seen as an Internet user base).

Targeting Airtel and Vi?

This is most likely to be an effort to cannibalise users from other mobile operators, like Airtel and Vi. The phone is priced at Rs 999 and comes with a monthly Internet access plan for Rs 123 ($1.5) for unlimited voice calls and 14GB of data. Jio claims, as it would, that this offer is 30% cheaper and offers 7 times more data than the plans offered by other operators. India’s internet user base has mostly been stagnating over the last few quarters. So, another price war might actually help shake things up a bit. Jio has been critical for Internet growth in India: if you check the charts, the launch of Jio in 2016 led to a decline in 2G connections and a massive increase in mobile broadband (3G+4G connections). Most people leapfrogged 2G and 3G and went straight to 4G.

Low-cost handsets are important

The Jio Bharat phone will be launched for beta testing for the first 1 million users from July 7, 2023, across 6,500 tehsils in India, and a commercial launch is planned for August 2023. Besides Reliance Retail, Karbonn is also planning to adopt the “Jio Bharat platform” to build “Jio Bharat phones”. What exactly is a “Jio Bharat platform”? Jio hasn’t detailed that yet.

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Low-cost handsets are important for Internet access because they bring access to the Internet for users. You can’t give 1GB a day for a few hundred rupees a month, and then expect a user to pay Rs 10,000 for a handset. Users also transition eventually from low-cost devices to higher-cost devices as their understanding of the utility of the Internet increases. Jio Bharat phone enables this and it augurs well for startups targeting Digital Bharat, including agritech startups. Remember that Jio had previously launched Internet-enabled feature phones. It is probably also trying to upgrade its own feature phone base as well.

Addresses shared access in low-income households? Lower-cost handsets also drive personal Internet access, rather than shared Internet access. Right now, many handsets are essentially household internet access, and this makes it difficult for women in these households to get to use the Internet. Lower-cost devices address this gap. However, this isn’t the Jio 5G phone: The Jio 5G phone is expected soon, but there also needs to be a more ubiquitous 5G infrastructure rollout. As of today, as per Reliance Jio’s website, they have 5G in 6,024 Cities/Towns, but only in 51 cities/towns in Jammu and Kashmir, 74 in Uttarakhand, 11 in Mizoram, 19 in Nagaland, 18 in Manipur.

Bundling services

Jio Bharat comes with Jio Pay for UPI payments, Jio Cinema for entertainment, and Jio Saavn for music, a camera apart from that very crucial non-Internet feature that was typical of feature phones: FM Radio. Bundling services into the same price and replacing other forms of entertainment also makes a lot of sense, as long as it doesn’t violate Net Neutrality, and offers differential data pricing. It’s not as if bundling has not been tried before like Airtel had Wynk and its own movie services bundled. All of this competition is fantastic for consumers.

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How many 2G users are in India? It’s worth noting that on average, the Indian Internet user consumes around 17.11 GB of data per month, and at around Rs. 10.1 per GB. This plan, at around Rs 8.73 per GB, if successful, is sure to push that number further down. It’s not clear how many Indian internet users are still on feature phones: Jio claims that number is 250 million. We do have data on 2G/narrowband usage, and connections from the Indian telecom regulator TRAI: Just in terms of numbers, between September and December 2022 (the latest available data), only 56 PB of data, of a total of 40,512 PB Data consumed in India was on 2G or 0.0014%. 98.93% was 4G. We’re not sure of how Jio is estimating that there are 250 million 2G subscribers in India. As per the latest available report, there were only around 33.7 million narrowband subscribers/connections in India. Narrowband is defined as Internet access with a capacity of less than 512 Kbit/s in one or both directions in India.

We still don’t have adequate 4G infra in all spaces. There are areas in the hills and in between towns and cities where it’s not adequate. At times, in some areas, one mobile operator has better infrastructure than the other, including in the case of Jio. I think eventually the availability of the network will be more important than the pricing of Internet of access in some regions, and that’s where Jio still needs work. Ps: I was on a show with CNBC-TV18 yesterday on the implications for Internet access with the launch of the Jio Bharat plan:

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

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