New Delhi: Reliance Jio Infocomm Ltd on Thursday announced a new plan exclusively for its Jio Phone users, offering free voice calls and unlimited data at Rs49 for a validity of 28 days.

The new plan will be introduced on 26 January, the company said in a statement. Reliance Jio will also introduce add-on data packs for Rs11, Rs21, Rs51 and Rs101.

“Under the Rs49 pack, the user will get unlimited data out of which 1GB will be at high speed, after which speed will fall to 64 kbps," a person familiar with the development said, requesting anonymity.

“This (feature phone) market is primarily a voice market and does not consume a lot of data," the person said, adding that this tariff is likely to boost sales of Jio Phone, which has already crossed 12 million units.

Reliance Jio entered the telecom sector in September 2016 and has taken it by storm—first through its free services, followed by cut-price tariffs and then through Jio Phone, which the company marketed as an “effectively free" 4G phone for a one-time refundable deposit of Rs1,500 and unlimited data and voice for Rs153 a month.

“Demand for Jio Phone continues to be very strong. All first bookings (6 million) have been supplied. We faced some supply constraints when we started out and we have overcome them. We’ll push the phones much more," Anshuman Thakur, head of strategy and planning at Reliance Jio, told reporters after the announcement of its financial results on 19 January.

Analysts say that this will spark a new round of tariff war in the feature phone market and will put pressure on other operators which are already witnessing stress on their revenue streams after Reliance Jio’s entry.

Idea Cellular’s quarterly loss more than tripled to Rs1,285.6 crore as the nation’s telecom regulator halved interconnection usage charges (IUC) and a tariff war sparked by new entrant Reliance Jio showed no signs of abating. Bharti Airtel also reported a 39% fall in December quarter profit to Rs306 crore.

Reliance Jio, on the other hand, benefited from the IUC cut as more calls originate from its network than terminate, and reported a profit of Rs504 crore in the December quarter, a first for the company, from a loss of Rs271 crore in the preceding quarter.

Reliance Jio added a net 21.5 million subscribers in the three months ended December, compared with 15.3 million users in the September quarter. At the end of December, Reliance Jio had a total of 160.1 million subscribers.

“Reliance Jio now seems to be aggressive in targeting the voice market. It attracted the top end of the market that is the data users in the beginning and will now attract voice users with this new tariff. This will hit Airtel and Idea, which have a chunk of customers in the low-end subscriber market, and were trying to get their users to move to higher-value packs," an analyst said on the condition of anonymity.

According to data from the Telecom Regulatory Authority of India (Trai), as of 30 September, Bharti Airtel had 23.84% of the wireless subscriber base followed by Vodafone India Ltd with 17.53% and Idea Cellular Ltd at 16.07%. Reliance Jio’s market share is 11.72%.

After the Jio Phone launch by Reliance Jio, companies in the sector too joined the bandwagon with Bharti Airtel announcing bundled devices in partnership with device manufacturers such as Intex Technologies, Karbonn Mobiles and Celkon while Vodafone India tied up with Micromax to offer phones bundled with its mobile services.

“The only catch is that customers still have to pay Rs1,500 upfront for the Jio Phone. The company will have to look at reducing this amount if it truly wants the phone sales to pick up and meet the target of 500 million subscribers," the analyst cited above said.

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