Billionaire Mukesh Ambani may have actually found a way to bridge the product gap between his ultra-affordable 4G VoLTE feature phone and a smartphone.
Ambani is reportedly in talks with the engineers of WhatsApp for a light-mode version of the popular messaging app for JioPhone, which will make its debut in September.
The discussions, according to a report by Factor Daily, are at a very nascent stage and the plan, the report quoting a source said, was to optimise the messaging app for JioPhone.
Ambani’s JioPhone product predicament was recently highlighted by JP Morgan in report. The US-based firm was skeptical over Jio’s proposition to hold on subscribers with Rs 153 a month plan. “In all likelihood, if the consumer can afford to pay at least Rs 153/month for three years (JioPhone ARPU pricing), s/he is quite likely a smartphone user well before this three-year period runs out,” it said in the report.
Smartphone penetration for Airtel and Idea have crossed 40% of their subscriber base even as a significant part of them are not broadband (3G/4G) users yet. The finding points out that the low-end of this smartphone user base operates at clear sub-Rs 200 ARPU (Average Revenue Per User) and consumers would likely to consider the pros and cons of downtrading to JioPhone from a smartphone.
It is this gap that Ambani wants to bridge and he may have found a way around it with WhatsApp. With more than 200 million active daily users in India and more than a billion worldwide, WhatsApp could give Ambani’s JioPhone the heft it needs, especially when its competitors are already working on affordable Android-based smart feature phones – Idea’s Rs 2,500 and Intex’s Turbo+ 4G – that can support Facebook and WhatsApp.
JP Morgan, however, is also concerned about JioPhone’s pricing, pointing out that the phone may not withstand consumer expectations and wouldn’t halt potential featurephone users’ plans to own a smartphone during a three-year lock-in period.
“Some of the (JioPhone) challenges relate to feasibility, while others relate to the product being attractive and attractively-priced enough to induce habit-changing consumption,” the brokerage said.