Bharti Airtel is reportedly in talks with smartphone manufacturers to offer a 4G smartphone as low as Rs 500 along with a bundled tariff plan priced between Rs 60-Rs 70. Alongside Airtel, other top telcos Vodafone India and Idea Cellular will also join the bandwagon and bring down the prices of smartphones to Rs 500. Maybe this upcoming scheme from Airtel, Vodafone and Idea Cellular works similar to the existing schemes of offering cashbacks after a certain amount of time with entry-level 4G smartphones.
That said, this approach is clearly different from that of Reliance Jio's as it's subsidising the JioPhone to garner more users. And the bundled tariff plan will compete with JioPhone's Rs 49 plan which offers unlimited voice calls without any limit for the month.
"We will gear towards low-cost smartphones via alliances. Smartphones are expected to become cheaper, so for an offering with them, it makes more sense than setting up our own phones," said an executive at one of the telcos to Economic Times. Also, the report added the emails sent by them to the telcos are unanswered.
Analysts say that the ARPU of the three telcos will hurt badly with this move, but it seems like the telcos are in a mindset of retaining subscriber base and allow them to upgrade to a smartphone with consuming mobile data.
"An executive at another operator said the intention is to bring down the effective prices of smartphones to the level of feature phones or even lower with bundled data and voice packages and cashback offers," further added the report.
Already, Airtel, Vodafone India and Idea Cellular have partnered with smartphone brands and offering entry-level 4G smartphones as low as Rs 999. Airtel recently said that its Mera Pehla Smartphone initiative had been a successful one, and if this report becomes true, the feature phone users in the country are in for a bonanza.
Also, this move from telcos will be to retain the 2G subscriber base and not allow them to shift to Reliance Jio's 4G network. Jio is the alone LTE-only operator in India, but the top telcos offer services in all network technologies- 2G, 3G and 4G.
In addition, Google's announcement of Android Oreo (Go Edition) for the Indian market came as a blessing for the telcos. Micromax already confirmed that it would be launching a Go Edition smartphone very soon at a low price of Rs 2,000. Bundle that with telcos current cashback offer; it will come down to Rs 500 itself. And a tariff plan with 250 minutes of voice calling every day and 1GB data for 28 days at Rs 69 or Rs 59 will surely give an edge to the top three telcos over Reliance Jio.