Reliance Jio phone push may delay tariff hike: Analysts
Reliance Jio is scaling up the distribution of the Jio Bharat phone after finding success in its initial run which further reduces the chances of a headline tariff hike, analysts said. They added that Jio's sharp focus on subscriber adds will continue to help it gain a wider user base but will further challenge average revenue per user (ARPU) growth in the absence of hikes.
«The JioBharat platform is ready to scale up with a successful initial trial of 1 million devices,» brokerage firm BNP Paribas said in a report after the telco's fiscal first-quarter (Q1FY24) results announced Friday. Earlier this month, Jio announced the launch of a new internet enabled feature phone — Jio Bharat — with the aim to capture a bulk of the 250-million-strong 2G user base in the country.
Unlike its predecessor — the JioPhone — Jio Bharat is launched using the Jio Bharat platform where manufacturers can collaborate with the telco to launch the phone. The initial run of the new product was done with 1 million devices starting in the first week of July.
«We are really looking forward to learning quickly from this initial deployment and really push ahead that vision of 2GmuktIndia as quickly as possible,» Kiran Thomas, president, Reliance Industries (RIL) said. The phone's pricing at ₹999, and recharge tariffs at a nearly 30% discount compared to peers could mean higher subscriber additions in the target market going forward, analysts added.
However, the strategy could come with the challenge to ARPU growth, as it limits the chances of a headline tariff hike in the near term. «Jio's increased focus on grabbing new subscribers could also be perceived as further reducing the likelihood of any near-term tariff hike,» analysts from Citi observed.
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