If 5G phones remain priced above Rs 10k, 5G services may not takeoff

Reliance Jio is working with Google on an affordable 5G smartphone but industry experts remain skeptical that it will be able to replicate the success of affordable Jio phones in early 2016.

The launch of affordable phones to boost subscribers has been the modus operandi for the telecom giant, since its entry into the market in 2016. With the massive roll-out of affordable 4G services, Reliance Jio launched a feature phone enabled with 4G technology to onboard the feature phone users on the 2G network. Since then, Reliance Jio has made two more launches of affordable phones including another version of a feature phone as well as its first affordable smartphone developed in collaboration with Google-JioPhone Next in 2021. However, sales for Reliance’s affordable phones, especially its 4G smartphone have only depleted over the years.

Faisal Kawoosa, Chief Analyst and Founder of Techarc noted, “JioPhone 1 in 2016 was the most successful selling 55-60 million units. Jio’s next version of the featurephone JioPhone 2 only sold 25 million units. Meanwhile, the smartphone launched in 2021, has approximately only sold 5 million units so far.”

Vibrant use
A key contributor to the decreasing trend, according to Kawoosa is the fact that an affordable smartphone which has to strip down many features does not offer a myriad of vibrant use cases that consumers have become accustomed to with 4G. “Users want to go beyond basic applications of Whatsapp, Facebook and UPI. Now an everyday user wants to watch YouTube, and play complex mobile games like PubG on their phone. Something that a Jio feature phone and even smartphone could not provide efficiently.”

With 5G ushering use-cases such as metaverse, cloud gaming and augmented reality, the computation needs for a phone will only increase and affordable 5G smartphones will unlikely fulfil the promise of 5G, as per Kawoosa. “Consumers are more discerning, which is why they will pass on such an offering,” he said.

Affordability
Navekendar Singh, Associate Vice President at IDC India, added that it is impossible in the current environment to even produce a phone below ₹10,000 for 5G purposes. “They (Reliance) were not clear by what they mean by affordability. The lowest tier of consumers however will not be able to access 5G.”

At present, even major OEMs are struggling to bring down the pricing of 5G smartphones with ongoing supply chain issues. 5G enabled smartphones are presently priced above ₹15,000 and only 20 per cent of smartphones sold in India are 5G enabled. Therefore, telcos will struggle to onboard subscribers onto their 5G network. Experts predict that 5G smartphone prices will go down during the festive season. BusinessLine previously reported that Realme will release its first 5G smartphone in the ₹10,000 to 15,000 range this Diwali season.
The Hindu BusinessLine