‘It Will Address Those Daunted By Cost Of Smartphones': Mahesh Uppal On Scope And Limitations Of Jio's Rs 999 4G Phone

Reliance Jio announced the launch of the Jio Bharat phone at Rs 999 with an aim to provide existing feature phone users access to affordable phones with the internet. There are around 250 million 2G customers in India currently, and most of them own and use feature phones. With Jio's new offering, they can easily transition to high-speed 4G internet. 

Jio Bharat's beta trial for the first 1 million phones begins from July 7 and will be conducted across 6,500 tehsils, according to reports.  At a cost of Rs 123 a month, users will get unlimited voice calls and 14 GB of internet.  

The move by the Akash Ambani-led telecom company is being widely welcomed and is being touted as a game changer for the telecom industry. Jio was launched six years ago in a bid to "democratise" access to the internet. Low-priced Jio Bharat is another step in that direction as Ambani Scion said that Jio will ensure that technology is not limited to a select few privileged people.  

Govindraj Ethiraj, founder of The Core, spoke to Mahesh Uppal, analyst and director of Com First (India), a telecom and internet advisory company, to understand how the transition to high-speed internet will impact the masses and the future course of action.  

"The 2G users are usually people from the low-income groups who cannot afford smartphones," Uppal said, adding that Jio Bharat will be able to cater to people who were daunted by the costs of smartphones. 

But the budget-friendly phone comes with its own set of limitations. "The screen size is about two inches wide, which also means that the phone is largely limited to non-video mode of communication," Uppal said. 

Here are the edited excerpts of the interview: 

Can you give us some background on the 250 million 2G customers? What is the speed they are experiencing today and what would it mean for them to transition to 3G and 4G? 

The 250 million 2G users are typically people in the low-income group who cannot afford smartphones. They are mostly from the smaller towns, but not limited to those towns because a feature phone seems to be the most affordable way of communicating for low-income people. Especially for those whose communication is limited to phone calls and maybe some level of SMS. 

Now, clearly, many of these people who use 2G are daunted by the cost of smartphones, which are not only quite high but have also been rising in recent years because of various geopolitical reasons. So, there is no doubt that Jio will be able to address a subset of these people who were daunted by the cost of smartphones. 

Having said that, it is important to recognise that Jio has not claimed that this Rs999 phone is a smartphone. The terminology used seems to be conspicuously not that of smartphones. So we must be aware that these phones are limited in some ways, and have some data capacity and some level of internet access. Obviously, this would mean people who use them would be able to shop or use Whatsapp, etc. I also understand that the screen size is about two inches wide, which also means that the phone is largely limited to a non-video mode of communication. So it's more transactional. You will probably be able to use some video but in a limited way. 

This phone will help people who miss this option and cannot afford the smartphone. And there is a large number of people in that category. Whether it is as much as 220 million is something that time will tell. 

 

Jio has mentioned that customers would be able to access Jio Cinema, Jio Saavn, and Jio Payment. So, as you mentioned there is the video, and some entertainment has been bundled in.  However, would it also mean customers would not have access to internet features or other internet sites? 

It is possible. It is not explicit in whatever I have read so far. So I do not know the details. However, I do get the sense that the reported size of the screen does not seem to encourage major video entertainment using that kind of phone. So that I think will mean that the phone is meant for transactions, messaging, and limited video. 

 

How do you broadly see the rollout of 4G? Reliance is saying that they plan to take everyone to 4G. Where do we stand in terms of our overall 4G coverage and networks across the country? 

It's a good point, and Jio must be given credit for that. Jio has actually expanded access to 4G in a huge way. Further, since it is an exclusive 4G network, it does not have the challenges that the competitors face - of legacy 2G and 3G networks. So, Jio has managed to create roughly 70%-80% coverage of 4G networks. However, this does not mean that 70%-80% of people can access it because accessing 4G will also require a device that can use 4G.

So, if I am somebody having a modest income and not able to afford anything beyond a feature phone, then 4G can only do that much for me. So I am not a big data user. That we must be aware of.

 

The key bottleneck seems to be the instrument and its cost, and not the networks, which clearly now have spread across the country in terms of high-speed data.

That is true to a large extent. However, we should be aware that there are other barriers to accessing the internet-digital literacy, and access to relevant content. Apart from some ten major languages of India, the rest of the languages have limited content on the internet. If you are a speaker or user of those languages, then obviously the internet's relevance is limited. Then again, if one is constrained by one's personal literacy that too makes a difference as many are still not entirely comfortable using data services. For them, the phone has been largely about telephony and some minimal messaging. So that number is still quite high.

 

Do you think it is possible for someone to launch a 4G phone or a smartphone at Rs999-the Jio price point- the lowest smartphone model available in the market today?

Yes, I think it is possible and time will tell if that would happen. There is certainly no doubt that this handset being introduced by Jio is an opportunity. We need to be aware that it is also a limited one, and also locked to the Jio network. So both these aspects are obviously constraints. A richer and more open-access device would certainly have its own attraction to people, especially to those who may be able to afford a device costing a couple of thousand rupees but not the full price of a smartphone.

I think there might be people who are willing and able to afford a bit more than Rs999 and would want the larger experience of accessing the Internet more widely.