Mukesh Ambani led Reliance Jio growth has been significantly aided by the presence of its feature phone Jio Phone.
The feature phone, which kicked off booking in August last year against a security deposit of Rs 1,500 to be fully refunded after three years, in last eight months sold roughly around 4 crore units (40 million), said a Credit Suisse survey.
Jio Phone sales of around 21 million for the quarter or roughly 7 million per month.
It is claimed to have around 36 per cent share of the feature phone market for January-March quarter of 2018 on an expanded market base, the survey added.
Meanwhile, the exit run-rate for last month (March) could be higher than this number since the Rs 49 plan got introduced in late January.
Jio has set a target to reach sales of 200 million phones by December 2018. In order to push sales of feature phone aggressively, the company is establishing Jio Centres and Jio Points, small offices in rural regions, and offering after-sales services and customer assistance.
There are over 1,000 Jio Centres in urban areas. The company is inching closer to having 7,000 Jio Points, out of which 3,500-4,000 are currently being used as a distribution chain for the Jio Phone.
This might serve as a worrying sign for incumbents as it is fastly increasing their market share. Jio consistently saw around 10 GB per month usage per sub in the smartphone segment.
Incumbent telcos are already witnessing down in revenue and profitability are coming up with new alliances to gain the sliding market share.
Airtel, Vodafone, and Idea are in talks with phone makers to make 4G smartphones available at mere Rs 500 to compete against Jiophone.
In Feb, Airtel forged a partnership with Google to bring low-cost smartphones powered by Android Oreo (Go edition) to India by March.
According to the market research firm, International Data Corporation (IDC), the feature phone sales grew by 17 per cent in 2017 over the previous year.
The growth signifies that telecom users in smaller cities and rural areas still prefer functional benefits of feature phones such as low cost, durability and battery life amongst others.
Currently, over 90 brands including Indian makers — Lava, Intex Micromax and Karbonn — sell feature phones.
Reliance Jio, which started services in September 2016, has triggered a tariff war, offering months of free data and charging cheap rates in the country with 4G network. At present, it has over 168 million paid users base, and also set a target of reaching 400 million subscribers by the end of 2018.
Besides core telco, it’s expanding into other segment leveraging its vast network and subscriber base. Of late, it has been investing in original video content and ancillary services. Jio also had also acquired Saavn to ramp up its stakes in entertainment quotient.
Last month, Jio Payments Bank also begun operations. It’s the third cellular company to enter payments bank space after Airtel and Idea.