While Jio calls the phones "free," they require a $22 deposit refundable only after three years. Jio plans start at thirty cents for 200 megabytes and unlimited calls for a day. $1.50 buys a gig/day for 7 days. It's less than $5 for a gig each day for 28 days. 500M Indians are still on 2G phones. Starting in September, Jio intends to migrate hundreds of millions to 4G.
Ambani's 4G network offers more than 10X the capacity of 2G & 3G, drastically bringing down the network cost. 4G is so much cheaper to run Ambani would come out ahead even with a $10/phone subsidy. The $20B LTE system is easily handling 100M paid subscribers. The government measured speeds have been going up despite the massive subscriber influx. It's designed to inexpensively upgrade to carrier aggregation and MIMO for 5X to 10X current capacity.
The Made-In-India JioPhone supports 22 major languages, voice over LTE, secure payments, and voice dialing. Press #5 to send a distress signal, a feature I predict others will copy. The chip is either a Qualcomm Snapdragon 205 or a Spreadtrum SC9820. The 205 is about as basic as you can get today. 3 MP camera, 640 x 480 screen and LTE Cat 4 topping out at 150 megabits. The SC9820 can support a 5 MP camera and 720P video. Both are manufactured on a years-old 28 nm process and have two ARM cores. The first iPhone had a 3.5 inch screen at 320x480. The JioPhone screen by one report will be smaller.
Bharti has actually added a few customers the last few months, but every other Indian telco is being decimated by Jio. Not long ago, India was the world's most competitive market with 12 substantial carriers. It will be down below five and possibly to three very soon.
The new phones will not have the performance of "smartphones," but will have similar functionality. The new Jio phones will probably be like the paytm phones in the picture, but with LTE and larger screens.
Carlos Slim predicted three years ago cheap phones would connect billions. He was right.
Update 7/21 Official announcement set price at "Free/$22" rather than the earlier plan of $8. Rewrote extensively.