Billionaire Ambani's Reliance Jio renews rural India push with $12 4G phone

(Reuters) -Reliance Jio said on Monday it would launch a 4G feature phone priced at 999 rupees ($12.19), the latest attempt by billionaire Mukesh Ambani's telecom arm to grab market share in India's massive and under-penetrated hinterlands.

Jio, which famously disrupted the Indian telecom sector in the last decade by introducing cut-price tariffs, will roll out entry-level phones equipped with internet services like digital payment in its push to reach those who have not yet migrated to smartphones.

"There are still 250 million mobile phone users in India who remain 'trapped' in the 2G era, ... at a time when the world stands at the cusp of a 5G revolution," Akash Ambani, chairman of Reliance Jio, said in a statement.

The move could also help Jio cement its leadership in telecom user base which has already crossed 439 million, far ahead of rivals Vodafone Idea and Bharti Airtel.

Following the tariff disruption in 2016, Jio had in 2021 launched the 4G JioPhone smartphone at 6,499 rupees, which after an initial sales surge is finding limited takers even after a price cut, a market study by IIFL Securities showed in May.

Currently, 4G feature phones account for less than 1% of the feature phone sales in India, per Counterpoint Research.

"Feature phone to smartphone transition has slowed down due to high learning curve for a lot of rural Indian users and Jio Bharat aims to bridge that gap," said Tarun Pathak, analyst at Counterpoint Research.

Feature phones are models that have higher functionalities than basic devices but falls short of the capabilities of a smartphone.

"4G is still a significant opportunity in India considering the 5G devices remain elusive from the sub-10,000 rupee segment ... and will also help Jio in giving consumers a taste if its services ecosystem," Pathak added.

The beta trial for the first 1 million so-called JioBharat phones will begin on July 7 and will take place across 6,500 tehsils or sub-districts in India, the company said.

Last year, parent Reliance Industries said it was working with Google to launch a budget 5G smartphone, but has not provided any further updates on the roll out.

($1 = 81.9510 Indian rupees)

(Reporting by Ashna Teresa Britto, Indranil Sarkar and Chris Thomas; Editing by Nivedita Bhattacharjee and Dhanya Ann Thoppil)