JioBharat : A rural disruption?

and venturing towards a 2G-free India

A few weeks back I wrote about government relief packages [using taxpayers’ money] to keep BSNL alive — with the primary objective of delivering 4G services to every village in India.

The folks at Reliance Jio took this GoI initiative very seriously it seems and have unveiled JioBharat — a feature phone — at a starting price of INR 999 with beta trials for the first million units set to begin from July 7th in 6,500 tehsils across the country.

Just like Jio disrupted the telecom market in 2016, I think this is a radical move which can give Jio a serious bite in the rural markets and drive user engagement further.

Should the government let BSNL die a natural death instead of letting it be a black hole for dumping taxpayer money?

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Market Opportunity > 900,000,000,000

250 MILLION.

That’s the amount of people who still use 2G era phones with little to no internet access. I had to fact check this number on multiple sources to be sure because I thought the number was TOO high. Who is still using 2G? Guys located in rural areas with low disposable incomes. My guess is that these customers are serviced by government operators like BSNL/MTNL.

With JioBharat — Reliance Jio is targeting this specific target audience to convert them to use 4G services and bring the country closer to a 2G mukt Bharat.

Does Reliance really need to get a piece of the rural markets? How BIG could the market be?

Turns out, its quite big.

Market Opportunity:

• Handsets - If you do that math, 250 million * INR 999 — it’s an INR 25,000 crore opportunity just by selling handsets.

• Data/Voice subscription - Let’s say that an average data/voice subscription would cost INR 200/month. That’s a 60,000 crore opportunity via subscriptions per year.

• Value Added Services - I’d assume another 2000-5000 crore per year to be extracted via value added services that Jio can offer.

If I am able to do the math, Reliance Jio would’ve done the math a couple of years ago and would’ve carefully planned how they would capture/disrupt this market.

They’ve already got the distribution network [maybe not in the remotest villages], the 4G spectrum, a wide variety of subscription offerings, the hardware, and the capital required for execution of its strategy.

Sucks for BSNL, which is already struggling to hold onto it’s market share.

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Is JioBharat good enough?

Well…the pricing of INR 999 certainly looks attractive for getting hands on 4G services. Besides that, the phone:

• Comes with a 28 day subscription plan at INR 123 with unlimited calls + 14GB of data. Jio claims that this is 30% cheaper than current alternatives and provides 7x more data.

• Offers expandable storage upto 128GB via external SD cards.

• Supports UPI payments via JioPay, gives access to JioCinema for OTT content and JioSaavn for access to songs in multiple languages.

• The camera isn’t that great [0.3MP camera] and the battery life wouldn’t be very long [1000 mAh battery] — but at a price point of INR 999, you wouldn’t worry too much about that.

Reliance Jio looks serious about capturing this market and I wouldn’t be surprised if other operators also launch something similar to compete with Jio.

What are your thoughts on JioBharat? Do you think it will disrupt the rural markets? Let me know in the comments!