Reliance Jio entered the feature phone arena with a bang on Friday, when it announced the free JioPhone, albeit with a Rs 1500 refundable security deposit. While we did get to see a demo of the device presented by the Junior Ambanis at the RIL AGM, a lot of questions did remain unanswered. For instance, we still don’t know the custom OS it uses. But, one of the most important questions industry analysts are raising is that of app support on the new Jio VoLTE feature phone.
At the RIL AGM, we were told that the JioPhone will extend support for Jio’s suite of apps including - Jio Cinema, Jio Music, JioTV, Jio Money, Jio news, and other social, utility apps offered by the telecom provider. However, it is not clear if the JioPhone will only support these apps and block access to competing apps.
In a report dated July 21, Deutsche Bank Market Research claimed that the JioPhone is based on the Firefox OS, and that apps on the device will come from the Jio App Store, creating a “Walled Garden” for subscribers, and giving Reliance Jio control over the apps its users can access. “We note that Jio already has an entire spectrum of apps spanning the social, content, payments verticals. Thus, a JioPhone user will likely have a very low churn both due to the ‘refund feature’ and the software platform,” noted Deutsche Bank.
Another investor note emerging from Kotak Institutional Securities evoked the Net Neutrality debate and said that the pre-installed apps on the JioPhone are a violation of Net Neutrality principles. “We believe this aspect would be highlighted by competitors to the regulator,” said the brokerage firm. The idea is that if Jio restricts its users to its own app ecosystem, it is effectively shadowing competitive apps and giving subscribers no option but to use its own apps and services.
To recall, the Telecom Regulatory Authority of India (TRAI) had ruled against discriminatory tariffs or data services on the basis of content back in 2016. So, if Jio bundles the JioPhone with a mandatory Jio SIM, and further limits content access on the device based on its own services, it would amount to discriminatory tariffs for data and content.
We saw something similar when Facebook tried to get its Free Basics service to India, giving users access to pre-selected apps for free. At the time, TRAI’s ruling in favour of Net Neutrality ended up driving Facebook’s ambitious free internet concept out of the country. That said, Jio has not yet officially responded to any reports from analysts or brokerage firms. There is no clarity on the fact that the JioPhone only offers Jio apps to its users.
A source close to the company told ET, “There is absolutely no question of the JioPhone violating net neutrality principles as users of the device will enjoy unrestricted access to the internet." However, we cannot substantiate this statement at the moment and await further details on the JioPhone from Reliance.