Airtel, Vodafone and Idea find A Counter To Jio
Airtel Vodafone Idea Counter To Jio
The top 3 operators Bharti Airtel, Vodaphone India and Idea Cellular are working with handset companies to make 4G smartphones. This handset drastically cheaper than feature phones and maybe as low as Rs 500. They also offer bundled voice and data plans for Rs 60-70 a month. Analysts said, While low-cost smartphones bundled with voice and data plans will hurt average revenue per user (APRU) in the near term, the telcos hope to retain their users and upgrade them to smartphones to increase data consumption in the medium to long-term. Bundling smartphones with data and voice plans is a better option.
The director general of the Cellular Operators Association of India, Rajan Mathews, represents all major telcos said,”Bringing out a new feature phone and subsidizing it will be akin to setting up a new business, which will be tough given the revenue pressures.”
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, said an operator. Jio recently slashed the minimum monthly recharge for JioPhone users to Rs 49 from Rs 153, with unlimited voice and 1 GB of data for 28 days after that operators, already battling slumping revenue, profitability and high debt, are lowering the price.
The executive said,”There will have to be a subsidy involved on feature phones, which they won’t be able to give, so the better option is to go for low-cost smartphones.”
An analyst said that “Feature or basic phone subscribers typically use mainly 2G voice services and account for 65-70% of India’s billion-plus mobile subscribers. They contribute 50% of the telecom sector’s revenue, sizeable enough for India’s operators to try everything to retain them “.
Bharti Airtel, Vodaphone India, and Idea Cellular are already collaborating with handset makers and offering bundled data and voice along with cash backs with the smartphone priced under Rs 1,500. That is the upfront amount refundable after three years, the upfront amount needed to buy Reliance Retail’s Jio Phone. Mathews said, “They will have to revise pricing, may not go head to head, but could bring in plans for phones starting from Rs 60-70 range“.
A research analyst at Counterpoint Technology Market Research, Shobhit Srivastava said that “The launch of low-cost 4G chipsets from Spreadtrum and MediaTek with Google’s Android Go strategy makes it possible for OEMs to offer cheap smartphones that live up to the first-time smartphone user’s expectations”.
An affordable VoLTE feature phone still costs about Rs 800 more than a JioPhone and it would be challenging for telcos to bridge that gap with offers alone, said An executive at a smartphone maker. Srivastava said, “The ideal upfront cost will be anywhere between Rs 1,500 and Rs 2,000, This can well come down to the level of Rs 500, depending on the plans that carriers offer.”
SUBSCRIBE & SHARE