Reliance’s Jio Bharat to accelerate government’s push for digital payments

Earlier this week, Reliance Jio launched India’s most affordable 4G phone ‘Jio Bharat’, at an unprecedented Rs.999 price point. The development comes on the back of Jio’s ambition to make India 2G free. Why is that important, you ask?

At a time when the 5G network roll out is picking pace in the country, we still have an estimated 250 million mobile subscribers trapped in the 2G era with feature phones. These users currently have no internet access, digital payment or entertainment options. And this results into a big digital divide in the country, predominantly existing between urban and rural India. It has increased over the years because of the inability of the rural, low income population to afford basic digital services.

According to a new report by Emkay Global Financial Services, with the recent increase in 2G tariff by telecom operators and limited availability of affordable feature phones, JioBharat is coming at the right time to accelerate the 2G to 4G transition and enable digital experiences for masses. The Jio Bharat phone is expected to democratise internet access, enhancing these users'economic prospects.With Jio's network and distribution strength along with the device, Jio would be able to capture over 40 per cent market share.

With the government’s consistent push for digital payments, we have seen significant behavioural shift in our cash-driven economy. The UPI system has grown rapidly and is now used by close to 300 million individuals and 50 million merchants. It is already announced that all panchayats across the country will mandatorily use digital payments for development work and revenue collection from 15^th August. Therefore, Jio Bharat’s entry with JioPay, a UPI-based digital payments app is poised to propel the growth of digital payments in rural India.

Jio Bharat is not only the cheapest 4G phone, but also 30% cheaper than competition in terms of service cost. A recharge of Rs 123 per month will provide users with unlimited voice calls and 14 GB data, compared to other operators' Rs 179 plan for voice calls and only 2 GB data.

According to the India Telecom report by JP Morgan, 'Jio Bharat' has the potential to disrupt the entry-level market. “We believe with this phone,Jio can take market share at the lower end of the market. This also puts Bharti at risk as it can see increased churn from its recent 2G price action of increasing the Rs99 plan to Rs155 plan,” said the JP Morgan report.

The launch of the Jio Bharat phone is a significant step towards digital inclusion in India. It promises to make quality, affordable internet accessible to everyone. This could transform the lives of people who have previously been constrained to 2G due to financial limitations and help Bridge the gap between ‘India’ and ‘Bharat’.