Topps Blog: VoLTE Feature Phone: The Final Piece in the Jio Puzzle

In an earlier article, I had explained why a Jio VoLTE feature phone made very good strategic sense. I had written the article well before the Jio VoLTE feature phone’s images leaked on the Internet, although news of the phone had leaked by the time it was actually published. Now that the images of the Jio VoLTE feature phone have been leaked, I think it is just a matter of time before we see Jio officially unveil it. Most would feel that this is just another phone. However, I feel that the Jio VoLTE feature phone is like the missing piece of a puzzle that reveals the bigger picture clear.

1. The apps now make sense!

Like most others, I had always seen Jio as a telecom company in spite of Jio repeatedly insisting that it’s a digital company. I have reviewed all Jio apps and services in the past and can say with confidence that Jio must have spent quite some time and money on them. Jio TV has all the channels that one would expect from a cable or DTH service. Similarly, Jio Music has a vast catalog of songs and Jio Mags is currently making a wide range of magazines (some of them very expensive) free of cost. Licensing all these content from their respective owners would have cost a fair bit of money. And yet, in spite of the Jio apps being decent enough, I was never optimistic about them.

By virtue of being a 4G operator, Jio’s initial target market was restricted to people who were accustomed to using smartphones. After all, the first to make the jump to 4G would be those who are already using 3G. But here is the thing about people who are accustomed to using smartphones: getting them to download and use new apps is close to impossible. If a regular smartphone user wants to watch videos, they will most probably open YouTube and not Jio TV. For music, they will probably open Saavn and not Jio Music. And for reading, it is a fair chance that they will already be using Pocket or some other similar app – not much chance of them going for Jio News.

Worldwide telecom operators have tried and failed to get people to use their in-house apps and most often people relegate carrier apps to bloatware that takes up space and resources. That is why no matter how hard Jio kept insisting on it being a ‘digital’ company, I was never sold on the narrative because I knew that in this day and age, people were unlikely to change their app preferences.

However now that the images of the VoLTE feature phone have leaked, Jio’s investments in its apps and services start making a lot of sense. Jio’s goal is to ensure that a lot of data flows through its network which it can monetize. Now, for a lot of data to flow through Jio’s network, the company needs a lot of users. I have explained in my previous article, how the VoLTE feature phone will be very instrumental in helping Jio gain 100 million or more *actual* subscribers.

But the thing is, just building a VoLTE feature phone cannot automatically guarantee data consumption. For people to consume data, they need apps and services. This VoLTE feature phone would either run a custom OS or a fork of Android – there’s very little chance Jio would be able to put Play Store on the device as it would most probably not meet Google’s compatibility standards for GMS certification. Even if a Play Store somehow comes on this VoLTE feature phone, the user experience of apps like Netflix, YouTube, Saavn, etc., is unlikely to be good as these apps have been designed with a touch interface in mind whereas the VoLTE feature phone has a T9 keyboard, which would be the default way to interact with the smartphone.

The solution for Jio is to take the matter into its own hands and build content and services itself which are exactly what the company seems to have done. Just have a look at the image of the Jio VoLTE feature phone below. The first four buttons on top of the T9 keypad are buttons for My Jio, Jio TV, Jio Cinema and Jio Music. Although I am sure that Jio would love to see people using Jio apps and services on their Androids and iPhones, I am more than certain that the reason Jio invested so heavily in apps and services is the VoLTE feature phones. There was no option for Jio but to get things done in house – in fact, the VoLTE feature phone itself is something that Jio has done in house.

2. Opening the door for differential pricing

I always thought that Jio would want to zero rate or charge differently for its own apps and services to give it an edge over the competition. Before the commercial launch took place, there were some hints of this as well considering that Jio would segregate the data consumed by Jio apps and other apps whenever I would try and produce a bill through the My Jio app. All the Jio apps are hosted on an intranet and these apps cannot be accessed until you have a Jio number. TRAI’s February 8 ruling on differential data pricing had made an exception for content hosted on intranets but the authority was quick to clarify that any attempt to thwart the competition using the intranet clause would not be entertained and would still be seen as a violation.

I now feel that Jio would somehow be able to zero rate/differentially price its own apps and services by virtue of its VoLTE feature phone. The VoLTE feature phone would be loaded with Jio’s apps and services and I am sure that there would hardly be any third party app or service that would run on the phone. Even if there is, Jio would most probably prevent people from sideloading apps or services.

Now all Jio needs to do is maintain one set of tariffs for its VoLTE feature phones and one set of tariffs for people that use Jio on their Androids or iPhones. One must keep in mind that the current Net Neutrality rules only prevent operators from zero rating services or charging different prices for different apps/websites. The rules do not prevent operators from maintaining a different set of tariffs for different devices. It is a common practice for operators to partner device manufacturers and provide free data.

Jio can do the same for its VoLTE feature phones: the data packs for VoLTE feature phones can be substantially cheaper than that of normal smartphones. From the outside, it might seem like Jio is just bundling cheaper data packs with its VoLTE feature phones and this is perfectly legal and normal. But since the VoLTE feature phone would be loaded with Jio apps and services alone, Jio would indirectly be zero rating/differentially pricing its own apps and services.

3. Making data the end product

Jio kept saying that at the end of the day its aim was to ‘empower’ the common man with technology. The company’s tagline also said as much: “Jio Digital life.” I was not convinced by this because when you build a 4G network alone, you restrict yourself to people who own 4G devices and at best only 10 percent of India’s population has a 4G device. How does one empower the ‘common man’ when one’s network is inaccessible to 90 per cent of the population?

The VoLTE feature phone is Jio’s answer. It will make the end terminal device as cheap as possible for people to access its 4G network. However, prices of end terminal devices alone are not alone responsible for the lack of data uptake in India. Voice is so popular in India because it is an end product. When voice started gaining popularity in India, it was because voice’s only function was to enable you to talk to someone who was far away. You basically just keyed in the number of the person you need to talk to, pressed the green button and voila, you could start talking and disconnect by pressing the red button.

Data, by comparison, has been more of a platform that people should know how to make use of. The use case for data is not immediately clear unless you are someone who is tech savvy. I know this might sound strange to the geek squad, but our minds have been programmed to use data to such an extent that we do not even realize that we are actually using data as a platform for various activities and not as an end product. We understand the variety of tasks we can accomplish with say 1GB of data or 3GB of data but the concept of MBs and GBs and the tasks they can perform is still not clear to a vast majority of people. Data has not been converted into an end product yet, in part because smartphones just kept becoming more and more complex, performing more and more functions. We use our smartphones to watch videos, make VOIP calls, browse Twitter, write e-mails, read news, etc., and while doing all this we subscribe to a particular MB or GB of data pack. Now if you are someone who knows how to make use of those MBs and GBs then spending money on a data pack makes sense, but if you do not know what to do of those MBs and GBs, then a data pack seems like a waste of money.

Some would argue that the apps in case of smartphones are the end products but again the way those apps can be used and at what rates is not always proportional. For example, if I recharge with say Rs 100 and get Rs 85 talktime then I can be reasonably sure of making around 70-80 mins of calls. On the other hand recharging with a Rs 100 data pack cannot guarantee me X number of YouTube videos as different videos have different lengths and resolutions.

I believe Jio is uniquely positioned to finally be able to make data the product because it controls the network, the apps as well as the device. In today’s age, while you may buy a 1GB data pack from Airtel, you need to buy a device from Samsung and maybe use YouTube to watch videos: three different parties which are no way related to each other. In the case of the Jio VoLTE feature phone, however, you will be using Jio’s network, a Jio device, and Jio’s apps. This puts Jio in a unique position as it can sell their apps as end products.

Take a closer look at how the apps are placed on the Jio VoLTE feature phone. They have separate buttons for themselves which just need to be pressed for the app to be in action – just like how you would press numbers on a keypad to dial someone. Secondly, since you will be using Jio’s app on Jio’s network, Jio can finally start charging you a fixed rate independent of the amount of data used. For example, Jio can just put a fixed price tag of Rs X /month for accessing all the apps that come on the Jio VoLTE feature phone, irrespective of how much or how long you use it. This will finally help Jio in converting data into an end product. Just like people paid Rs X to talk for X minutes, they will be paying Rs Y/month to Jio for accessing all of Jio’s apps and services. Think of it like how people currently pay their local cable or DTH guy a fixed amount per month, irrespective of usage and access various channels using the remote. Jio’s VoLTE feature phone will be the same.

People would be paying for Jio thinking that they’re paying for the various apps on the phone while the data usage part is completely hidden from the customer for the most part. I am a firm believer that rather than the cheap price of VoLTE feature phone, the phone converting data as an end product that is just a click away is what would enable Jio to ‘empower’ end users with technology.

4. Two bundles, two audiences

Jio would be serving two types of consumers. A lot of people living in urban areas would be using Jio just as a connectivity provider. People like me (and other relatively tech savvy people) who already have their own preferred destination for readings news, watching videos, etc., and have their own preferred device would use Jio as a dumb pipe. Our interest in Jio would be limited to its data plans and how cheap and fast its network is. We could be sold onto Jio’s upcoming GigaFiber plans. There is a very good opportunity for Jio to bundle its mobile data plans and its broadband plans and sell them to this audience.

On the other hand, its VoLTE feature phone would also be serving people who want data as end products. These people would have no clue what MB or GB is, but they will most probably buy a VoLTE feature phone from Jio and pay a fixed amount of fee per month to access Jio Music, Jio TV, and Jio Movies. Here Jio would be bundling content, data and the end terminal device. Jio would act as a true ‘digital solutions’ provider in this case.

The feature phone makes even more sense now!

A lot of what Jio is up to now becomes very clear. The VoLTE feature phone will play a major role in all of Jio’s plans, allowing the company to reach a wider audience and also justifying its massive investments in content and services. Jio Digital Life seems so much more possible now.