Ratings agencies divided on impact of JioPhone

KOLKATA: Local ratings firms CARE and ICRA expect the recently launched JioPhone to make a dent in the market share of featurephone players and increase the competitive intensity in the telecom sector. But they are sceptical about the new 4G device’s impact on the smartphone turf dominated by global brands.

Harsh Jagnani, sector head and vice-president-corporate ratings at ICRA, expects JioPhone to increase competitive intensity in the market, especially with the Mukesh Ambani-controlled Reliance Jio targeting users in rural areas and those who typically spend less on telecom services. "If the JioPhone proposition sees wide acceptance, it will pose serious competition to other players, although smaller ones will be more threatened," Jagnani said in a note Tuesday.

CARE Ratings, which expects JioPhone to make a dent in the market share of featurephone players, said Jio has launched the 4G compatible phone with smart features to further gain subscriber base in telecom services space.

The firm said Jio’s network coverage in remote areas would be critical for the company to sustain subscriber additions triggered by the introduction of JioPhone.

Analysts at CARE said JioPhone was "unlikely to make a significant impact on the smartphone market", which it said continues to be dominated by players such as Samsung, Xiaomi, Lenovo, Oppo and Vivo.

According to GSMA’s Mobile Economy Asia Pacific report, 28 per cent of mobile subscribers in India use smartphones.

The ratings firms also are not too upbeat about the future potential of JioPhone as bundled devices have not prospered in India.