A $12 phone is opening doors for rural India to get on the internet
There are about 250 million feature phone users in India, and many of them still use 2G phones and only for voice calls, according to the International Data Corporation
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The world may be moving on to super-fast internet speeds on 5G or even 6G, but masses in rural India are still stuck in the 2G era.
All that could change with a new $12 phone from Reliance Jio this week.
The telecommunications arm of Indian conglomerate Reliance Industries, has opened the door for more people to gain access to the internet through the launch of its new internet-enabled phone with a 4G mobile network. Feature phones are essentially non-smartphones that have a push-button keypad and a small non-touch display.
Reliance Jio’s new feature phone aims to reduce the mobile connectivity gap between rural and urban India by giving non-smartphone users a cheaper alternative to switch from 2G to 4G mobile networks.
“There are still 250 million mobile phone users in India who remain trapped in the 2G era, unable to tap into basic features of the internet at a time when the world stands at the cusp of a 5G revolution,” Reliance Jio’s Chairman Akash Ambani said in a press release.
5G refers to the next-generation mobile networks that offer data at very high speeds, and are needed to support advanced technologies like driverless cars and virtual reality.
The new phone, named Jio Bharat, serves as an entry-level phone for first time internet users that would just rely on the basic functions without being convoluted by the endless number of applications that can be found on a smartphone, Varun Mishra, senior analyst at Counterpoint Research, said.
India is already the world’s second-largest smartphone market and is likely to add 300 million new internet users, making it the fastest country to provide internet services to those who remain unconnected, Mishra said.
“With a familiar form factor and internet connectivity, this device can help users experience key services like digital payments, content, and more for the first time through Jio’s ecosystem,” Mishra told CNBC. “However, screen size can limit the experience a bit, but still good for first-time internet users.”
Customer retention
Jio has an upper hand against its competitors in the telco service space, such as Vodafone Idea — a partnership between Aditya Birla Group and Vodafone Group — as well as Bhati Airtelas and BSNL.
Apart from selling the phone at an extremely low price point, monthly plans from Jio are also very affordable — and the other telco companies could even start losing customers, Mishra highlighted.
Reliance Jio claims that their monthly plans are 30% cheaper than other telcos, and offer customers seven times more data.
Paying $1.50 will get users unlimited voice calls and 14 gigabytes of data, compared to almost $3 for other voice calls and just 2 gigabytes of data from other operators, Reliance Jio’s press statement claimed.
This is Jio’s tactic to attract more feature phone users to sign a plan with them even though they only offer 4G and 5G mobile network services, according to Navkendar Singh of the International Data Corporation (IDC).
Reliance Jio has rolled out 5G services in 406 cities in India.
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There are about 250 million feature phone users in India, and many of them still use 2G phones and only for voice calls, according to Mishra.
Reliance Jio attracts these consumers and take them away from “legacy operators” by offering more “palatable” price plans, Singh told CNBC in a phone interview.
“From what we understand, the main objective for Jio is to get more customers on the Jio platform and the Jio network, and they can then start cross-selling the services,” he said, explaining that customers can also tap on Jio’s payment and streaming services.
Additionally, Singh highlighted that Reliance Jio hopes first-time internet users who purchase the Jio Bharat will eventually upgrade to more advanced phones down the road.
“Right now, Jio gets revenue of about $1.50 to $2 a month, and when customers subsequently upgrade their phones in three or four years time, they would choose more advanced feature phones or low cost smartphones at some point in time,” he added.
Price war with other telcos?
Analysts who spoke to CNBC also agree that despite Jio’s cost-friendly plans, other telco companies are unlikely to significantly drop their prices.
“There’s been an ongoing tussle between Jio and other telcos in India,” said Nikhil Batra, research director of IDC.
“Lowering prices across the board will not be a viable option, but it will be a challenge for [other telcos] to create new customer experiences and product bundles to increase customer stickiness,” Batra said.
According to data from Macquarie Research, Jio currently has the biggest subscriber market share in Delhi (34%), Mumbai (35%), and Kolkata (42%), compared to Vodafone Idea, Bharti Airtel and BSNL.
However, other telcos could still benefit from those in India who continue to choose phones that do not let them surf the internet.
Macquarie data also showed that in rural areas such as Bihar, Jammu and Kashmir, and Himachal Pradesh, Bharti Airtel holds a larger market share than Jio.
India’s 5G rollout
India has the world’s second largest telecom industry with a subscriber base of 1.17 billion people as of September 2022, data from IDC showed. The growth trajectory of the sector is just going to get higher from here, the market intelligence firm said.
“The industry’s growth over the past few years has been primarily driven by lower tariffs, availability of affordable smartphones, launch of telecom services by Reliance Jio, expansion of 4G coverage, and higher data consumption by subscribers,” Batra said.
More consumers are also expected to purchase smartphones that have a 5G mobile network.
About 52 million 5G-enabled phones were purchased in 2022, an increase from 26 million the previous year, IDC data showed.
“India’s 5G rollout has been much quicker and smoother and is well on course to reach pan-India by Jio by the end of the year. Jio and Airtel already have 5G services, and Vodafone Idea and BSNL are expected to join in rolling out 5G by 2024,” Counterpoint Research’s Mishra said.
Men talk on their mobile phones in front of an iphone 14 advertisement, in Kolkata on September 27, 2022.
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Counterpoint Research estimates there are nearly 85 million users of 5G capable smartphones in India, and 5G handsets had captured 32% of market share in 2022. Over 50% of smartphones shipped in April 2023 had 5G capabilities as well.
However, this is largely supply driven, Batra said. That’s because “brands are able to bring in more 5G devices due to the better supplies achieved by 5G roll out and demand for 5G phones in other countries such as China and Korea.”
“Consumers in India have not really demanded a 5G device until now, their purchases being driven by the availability as almost all smartphone models are priced around $300 and are 5G capable,” he added.
Despite regulation and telecom infrastructure challenges, “India will be a major market for 5G by 2026 and will dominate the 5G net additions just as China starts to mature and decelerate,” Batra said.
Technology is playing a much bigger role these days and “we can expect India to further accelerate and set an example,” he said citing the example of banking and Unified Payments Interface as an example.
“India leapfrogged the majority of developed nations in making digital payments convenient, accessible, and widely accepted, irrespective of merchant sizes,” he added.
Chuck Robbins, chief executive officer of Cisco, participates in a Bloomberg interview at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2024.
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Few companies were as hot in early 2000 as Cisco, whose networking equipment served as the backbone of the internet boom.
On Wednesday, Cisco’s stock surpassed its dot-com peak for the first time. The shares rose almost 1% to $80.25, topping their prior split-adjusted record or $80.06 reached on March 27, 2000. That’s the same day that Cisco passed Microsoft to become the most valuable publicly traded company in the world.
Back then, investors saw Cisco as a way to bet on the growth of the web, as companies that wanted to get online relied upon the hardware maker’s switches and routers. But following a half-decade boom, the dot-com bubble burst just after Cisco reached its zenith, a collapse that wiped out more than three-quarters of the Nasdaq’s value by October 2002.
While the market swoon eliminated scores of internet highflyers, Cisco survived the upheaval. Eventually it started to grow and expand, diversifying through a series of acquisitions like set-top box maker Scientific- Atlanta in 2006, followed by software companies including Webex, AppDynamics, Duo and Splunk.
With its gains on Wednesday, Cisco’s market cap sits at $317 billion, making it only the 13th most valuable U.S. tech company. In recent years, the stock has badly trailed tech’s megacaps, which have been at the center of the new boom surrounding artificial intelligence.
The AI market has reached a level of euphoria that many analysts have compared to the dot-com era. Instead of Cisco, the modern infrastructure winner is Nvidia, whose AI chips are at the heart of model development and are relied up by the other major tech companies that are all building out AI-focused data centers. Nvidia has a market cap of $4.5 trillion, roughly 14 times Cisco’s current value.
But Cisco is angling to benefit from the AI craze, with CEO Chuck Robbins in November touting $1.3 billion in quarterly AI infrastructure orders from large web companies. Total revenue approached $15 billion, which was up 7.5% year over year, compared with 66% growth in 2000.
Shares of Cisco are up about 36% so far in 2025, outperforming the Nasdaq, which has gained about 22% over the same period.
WATCH: Cisco CEO on latest quarter: AI demand from hyperscalers is accelerating
Larry Ellison, Oracle’s co-founder and chief technology officer, appears at the Formula One British Grand Prix in Towcester, U.K., on July 6, 2025.
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Oracle is scheduled to report fiscal second-quarter results after market close on Wednesday.
Here’s what analysts are expecting, according to LSEG:
- Earnings per share: $1.64 adjusted
- Revenue: $16.21 billion
Wall Street expects revenue to increase 15% in the quarter that ended Nov. 30, from $14.1 billion a year earlier. Analysts polled by StreetAccount are looking for $7.92 billion in cloud revenue and $6.06 billion from software.
The report lands at a critical moment for Oracle, which has tried to position itself at the center of the artificial intelligence boom by committing to massive build-outs. While the move has been a boon for Oracle’s revenue and its backlog, investors have grown concerned about the amount of debt the company is raising and the risks it faces should the AI market slow.
The stock plummeted 23% in November, its worst monthly performance since 2001 and, as of Tuesday’s close, is 33% below its record reached in September. Still, the shares are up 33% for the year, outperforming the Nasdaq, which has gained 22% over that stretch.
Over the past decade, Oracle has diversified its business beyond databases and enterprise software and into cloud infrastructure, where it competes with Amazon, Microsoft and Google. Those companies are all vying for big AI contracts and are investing heavily in data centers and hardware necessary to meet expected demand.
OpenAI, which sparked the generative AI rush with the launch of ChatGPT three years ago, has committed to spending more than $300 billion on Oracle’s infrastructure services over five years.
“Oracle’s job is not to imagine gigawatt-scale data centers. Oracle’s job is to build them,” Larry Ellison, the company’s co-founder and chairman, told investors in September.
Oracle raised $18 billion during the period, one of the biggest issuances on record for a tech company. Skeptical investors have been buying five-year credit default swaps, driving them to multiyear highs. Credit default swaps are like insurance for investors, with buyers paying for protection in case the borrower can’t repay its debt.
“Customer concentration is a major issue here, but I think the bigger thing is, How are they going to pay for this?” said RBC analyst Rishi Jaluria, who has the equivalent of a hold rating on Oracle’s stock.
During the quarter, Oracle named executives Clay Magouyrk and Mike Sicilia as the company’s new CEOs, succeeding Safra Catz. Oracle also introduced AI agents for automating various facets of finance, human resources and sales.
Executives will discuss the results and issue guidance on a conference call starting at 5 p.m. ET.
WATCH: Oracle’s debt concerns loom large ahead of quarterly earnings
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