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The launch of Reliance Jio Infocomm Ltd’s 4G-enabled feature phone will help reverse the moderation in subscriber additions and support revenue growth, according to brokerage firm CLSA.
"Our channel checks indicate that a 4G feature phone launch by Jio is imminent", the brokerage said in a 11 July report. The feature phone by Reliance Jio, though locked to the network, will support Voice over LTE (VoLTE) and have a suite of data applications, CLSA added.
A feature phone incorporates basic features like calling, internet access and music but lacks the advanced functions of a smartphone.
The newest entrant in India’s crowded telecom space is hitting the 4G device hurdle at a time when the penetration of such devices is already at 85 percent, CLSA said.
Feature phones still outsell smartphones in India with total shipments at around 13.6 crore compared to 11.3 crore for the latter in financial year 2016-17, according to the brokerage. "Our industry check indicates that there are around 500 million feature phone users in India", CLSA said, adding that 70 percent of these have a monthly average revenue per user of Rs 50 or lower.
The 4G feature phone is likely to be priced between Rs 500-1000 despite being "superior to currently available phones", the brokerage said. Jio could also bundle promotional tariff offers along with its feature phone.
The brokerage expects the telecom sector's revenue to fall 7 percent year-on-year in FY18 led by "promotions and retaliatory tariffs", and a rebound is likely only in FY19 when Reliance Jio starts charging customers fully.
(Read more on this story on BloombergQuint.)
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