Reliance Jio has engaged an undisclosed vendor in Chennai to make its flagship phone after capacity bottlenecks at the unit in China where the initial batch of 6 million devices were produced
New Delhi: Mukesh Ambani’s Reliance Jio Infocomm Ltd is shifting production of its 4G feature phones to India to overcome supply related issues at its Chinese vendor’s facility.
Jio has engaged an undisclosed vendor in Chennai to make its flagship phone after capacity bottlenecks at the unit in China where the initial batch of 6 million devices were produced, two people with direct knowledge of the matter said.
“In the second phase, we have received expressions of interest for 10 million devices and have already started manufacturing in Chennai," one of the two people said, adding that the operator is reaching out to prospective buyers through text messages wherein they are asked to make a payment of Rs1,500 to collect their devices.
In July, Ambani had said production of Jio phones in India would start in the last quarter of the year.
The second person aware of Jio’s plans said the capacity constraints at the Chinese vendor’s facility may result in Jio missing its sales target.
“The manufacturing capacity in China is 300,000-400,000 devices per day maximum. The fulfilment team responsible to get the devices manufactured has not been able to deliver. The target to achieve sales of 200 million phones by December 2018 seems unlikely," this person said.
A detailed questionnaire sent to Jio seeking a response to Mint’s queries on Friday remained unanswered till press time.
Jio has taken the telecom world by storm—first through its free services, followed by ultra-cheap tariffs and then through JioPhone, which the company marketed as an “effectively free" 4G phone for a refundable deposit of Rs1,500 a month.
A customer gets free voice and messaging services and unlimited data for Rs153 a month.
At the time of the launch, Reliance Industries Ltd (RIL) chairman Mukesh Ambani had announced that the company was “targeting to have 5 million Jio phones available every week".
According to Mint’s estimates, after the first delivery of 6 million phones between September and October, the company should have brought at least 40 million phones to the market.
Companies in the sector too have joined the bandwagon with market leader Bharti Airtel Ltd announcing bundled devices in partnership with device manufacturers such as Intex Technologies, Karbonn Mobiles and Celkon. Vodafone India Ltd too has tied up with Micromax to offer phones bundled with its mobile services.
This is expected to create some pressure on the Reliance Industries subsidiary in the fight to gain subscriber market share.
As of October end, Reliance Jio has reached a subscriber base of 145.96 million users, according to data from the Telecom Regulatory Authority of India (Trai).
It has set an internal target of reaching 400 million subscribers by the end of 2018 and is banking on the sales of its SIM-locked Jio phone to achieve that goal.
The company believes handset sales would boost its subscriber base on the back of various features, but most importantly, video calling
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