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Will Reliance JioPhone clash with net neutrality principles?

The Reliance JioPhone unveiled by Akash Ambani and Isha Ambani at the company AGM on Friday. Any set of pre-installed apps—Reliance Jio apps or not, doesn’t matter—on a handset where the consumer cannot install competing apps, flirts with the boundaries of net neutrality.Premium
The Reliance JioPhone unveiled by Akash Ambani and Isha Ambani at the company AGM on Friday. Any set of pre-installed apps—Reliance Jio apps or not, doesn’t matter—on a handset where the consumer cannot install competing apps, flirts with the boundaries of net neutrality.

Unless there is an independent app store on Reliance JioPhone, which will have pre-installed Reliance Jio apps, net neutrality purists won't be happy

New Delhi: Reliance Jio Infocomm Ltd’s latest attempt at disruption in the Indian telecom space is now targeting smartphone makers—particularly those who make the more affordable feature phones—but lack of information on the product itself has sent alarm bells ringing, according to analysts.

A 21 July report by Deutsche Bank Market Research informed its investors that it believes JioPhone is based on a Firefox mobile operating system and since the applications on a JioPhone will come from its own store, it will provide a “walled garden" to its subscribers, which “goes beyond the traditional connectivity".

“We note that Jio already has an entire spectrum of apps spanning the social, content, payments verticals. Thus, a JioPhone user will likely have a very low churn both due to the ‘refund feature’ and the software platform," Deutsche Bank said in the report while staying clear from calling it a net neutrality issue.

Analysts at Kotak Institutional Equities said a walled garden, which is any set of pre-installed apps (Jio apps or non-Jio apps, doesn’t matter) on a handset where the consumer cannot install competing apps, flirts with the boundaries of net neutrality.

“This is too nuanced an area for us to make any definitive comment, but we do believe this aspect would be highlighted by the competitors to the regulator," the analysts said in a note to clients.

R.S. Sharma, chairman of the Telecom Regulatory Authority of India (Trai), did not respond to phone calls and text messages. An email sent to Jio remained unanswered till press time.

So, is there no room for other apps on JioPhones?

“I am not very sure of technicalities but unless there is an independent app store, the net neutrality purists won’t be happy. That operators can’t act as gatekeepers is the fundamental premise of net neutrality," an industry analyst said seeking anonymity.

To be sure, as of yet, there is not much clarity about the nature of JioPhones in the context of whether it will limit its users to download applications from its store or allow them to use outside applications.

Trai’s differential pricing ruling in 2016 has two parts: Firstly, that “no service provider shall offer or charge discriminatory tariffs for data services on the basis of content".

That is clearly not happening in this case, because this tariff is for the device and not content.

However, the order also states that “no service provider shall enter into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content."

Thus, if Jio were to lock the SIM to a particular device, and that device were to limit users to a specific set of services determined by Jio, then this would end up having the same effect as discriminatory tariffs for data services, and be in violation of the Trai order.

According to Nikhil Pahwa, co-founder of the campaign for net neutrality in India, and founder of digital news site, there is not enough information available on the JioPhone yet to say whether the service will clash with net neutrality.

“We don’t know whether the Jio phone limits the user to a particular selected set of apps and services. If it limits users to only Jio apps, or partner apps, that would make it similar to free basics—where Facebook had tied up with a telecom operator to limit users to their selection of apps for free. The Trai ruling banned operators from giving preferential pricing to a particular set of apps. If the users are able to download apps beyond what Jio has to offer, and browse the open Internet, it would not affect net neutrality," Pahwa said.

“I am aware that certain brokerages have come out with reports on the issue but I do not know where they are getting that information from," he added.

A person in the know of Jio plans said the phone allows users to access non-Jio apps. “A JioPhone allows Jio apps as well as non-Jio apps. The apps on Jio phones will be limited by memory, processor and compatibility to operating system. Also, a user can browse anything on internet and, therefore, it does not go against the rules of net neutrality."

The entire concept of feature phones revolves around retaining the simplicity of telephony from the yesteryears, by offering basic calls and messaging features, as well as basic internet and some apps.

Unlike smartphones running Google’s Android or Apple’s iOS, these are simpler to use and don’t have complicated features and apps. It is a fact that the JioPhone brings back the attention on feature phones, which till now were looked upon as a compromise, in many ways.

The apps on JioPhone are basic, built using HTML5, which will help the feature phone emulate a basic smartphone.

HTML5 (the fifth version of the hyper text markup language that makes browsers render web pages correctly) mobile application development reduces cost of developing apps.

All major browsers support these technologies, but they have performance and security concerns, too.

The JioPhone does bring faster 4G internet connectivity (as against the fairly unusable 2G speeds that many feature phones are capable of), better voice (with voice over LTE) and also TV streaming. Jio, on its website, is now allowing potential buyers to register their interest in buying the JioPhone by signing up with your contact details.

Vishal Mathur in New Delhi, and Mobis Philipose and Leslie D’Monte in Mumbai contributed to this story.

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