Reliance Jio May Spend INR 18,750 Cr In Subsidies To Price ‘JioPhone Next’ At INR 4K

Reliance Jio May Spend INR 18,750 Cr In Subsidies To Price ‘JioPhone Next’ At INR 4K

SUMMARY

Up from the predicted INR 15,000 Cr, Reliance Jio may need to spend nearly INR 18,750 Cr in subsidies, to sell an estimated 75 Mn units of ‘JioPhone Next’ due to a rise in component prices and global chip shortages

Previously scheduled to be launched on the eve of the Ganesh Chaturthi festival (September 10, 2021), JioPhone Next is delayed until pre-Diwali (November 4, 2021) due to chip shortages

According to a report, mass upgrades to JioPhone Next could potentially boost Jio’s FY23 revenue estimates by up to 10% assuming no changes to tariffs

To provide ‘JioPhone Next’ at the affordable range of below INR 5K, Mukesh Ambani-led Reliance will reportedly spend INR 18,750 Cr in subsidy.

According to an ET report, citing IIFL Securities’s estimation, Reliance Jio might need to subsidise consumers to the extent of INR 15,000 Cr if it targets selling around 75 Mn units, at INR 2,000 subsidy apiece.

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