India’s second largest telco Bharti Airtel has started talks with home-bred handset companies for bundling partnerships in a bid to ring fence its low-end 2G customers in the lead up to Reliance Jio Infocomm’s plan to launch high subsidised 4G smartphone in partnership with Google.
The latest move is also aimed at migrating its own 2G users to 4G network with the help of cheap smartphones that will be bundled with data, voice and content services,
According to local reports, the Sunil Mittal-led telecom operators has appointed BCG as consultants for the project, which is aimed at protecting 2G users and to boost average revenue per user (ARPU), a key performance metric.
Airtel is currently in the advanced stage of finalising its smartphone strategy. It could sell these low-cost smartphones under Airtel brand or could just bundle the phone with its services and SIM.
Airtel has historically kept itself away from any handset subsidy or locked smartphones, a model which Jio adopted when it launched its services in September 2016.
According to reports, both Airtel and Jio are trying to grab a major share of the roughly 400 million mobile phone users who still use feature phones in India and could be converted into 4G users.
All three Indian handset brands — Micromax, Lava and Karbonn — are in talks with Bharti Airtel to develop low-cost 4G smartphones. Interestingly, all three handset players exited the smartphone market after facing an intense competition from Chinese smartphone brands.
“The discussions are preliminary in nature and the company has given specifications such as 5-inch screen, 8 GB ROM and is looking at a price point of up to Rs 2,500,” a person was quoted as saying by the Economic Times.
The person further added that Airtel will lock the phone with an Airtel SIM and data packs and the payment could be spread over a period of time.
Another person, however, said that Airtel could also buy the devices in bulk and sell them under the company’s brand if it is not able to reach better commercial terms with handset brands on own-branded handsets.
Mukesh Ambani’s Jio earlier this year joined hands with Google to develop low-cost 4G and 5G smartphones to help migrate India’s 350 million 2G-based feature phone users to 4G smartphones.
Ambani, who’s the world’s fourth richest man, recently said that India still has 300 million mobile subscribers that are trapped in the 2G era and their feature phones keep them excluded even from the basic users of the internet at a time when both India and the rest of the world are standing at the doorsteps of 5G telephony.
Having cornered close to 400 million 4G users in India, Reliance Jio is now eyeing the country’s large 2G subscriber base which is currently using networks of Airtel, Vodafone Idea, BSNL and MTNL.
According to reports, India has around 350 million feature phone users and 60 million users that use Jio’s 4G feature phone.
Both Jio and Airtel are looking to bring these users to their respective 4G networks via full-fledged 4G smartphones.
Jio has around 400 million users which all are on 4G, while Airtel has 138 million 4G users out of a total subscriber base of 280 million subscribers. Airtel still offers 2G and 3G services in select circles in India.
The 4G-only telco is likely to outsource the manufacturing of over 100 million low-cost smartphones that will be built on Google’s Android platform, reports said.
The reports added that Jio will bundle these low-cost 4G smartphones with data packs to make the offering lucrative. Jio could launch these phones in December 2020 or early next year. This is the second attempt by the telco to launch own-branded smartphones, having previously launched ‘Lyf’ branded smartphones.