Reliance Jio’s festive offer of low-priced phone led by piling inventory

Reliance Jio’s festive offer of a lower-priced JioPhone is likely to have been driven by higher inventory of the feature phone in a market where new buyers are increasingly turning to smartphones.

“While this will boost Jio’s October subscriber additions, given that this offer is limited to the festive season, it is unlikely to clear the 40 million in channel handset inventory. Thus, an extension cannot be ruled out. In addition to risk of increased subscriber churn, the cut in the price may adversely impact Airtel’s and Vodafone Idea’s ability to monetise voice subscribers,” wrote Deepti Chaturvedi, analyst at CLSA.

Last week, Jio, telecom arm of Reliance Industries, said it would during the Dussehra and Diwali period make the JioPhone available for a special price of Rs 699, against the current Rs 1,500.