Airtel, Idea Gear Up Against JioPhone

India's mobile operators are working frantically with device makers on developing cheap 4G handsets in response to the recent launch of the low-cost JioPhone by new entrant Reliance Jio. (See RJio Disrupts Again With Low-Cost 4G Phone.)

Recent media reports suggest Airtel's aim is to develop 4G handsets that cost as little as 2,500 Indian rupees (around $40) each. It is likely to launch new devices before Diwali (India's festival of lights) next month.

Nor is Bharti Airtel Ltd. (Mumbai: BHARTIARTL) the only Indian operator to have taken a much keener interest in devices in the Reliance Jio era. Number-three player Idea Cellular Ltd. -- which is merging with number-two operator Vodafone India -- is also thought to be in similar discussions with handset makers. In all probability, it will also launch devices during the festival season.

Countering RJio's latest move will not be easy. Launched earlier this year, the JioPhone effectively costs the end user nothing. In an effort to spur 4G take-up in the feature phone segment of the market, RJio is providing the JioPhone in exchange for an initial payment of INR1,500 ($23.3). But even this can be claimed back if a customer returns the device after three years.

The response has been dramatic. After millions of consumers signed up to the offer within the first few days, RJio was forced to discontinue it. Later this month, it is likely to start delivering gadgets preloaded with applications including Jio Cinema, Jio Music and Jio Money. Airtel and Idea have not yet indicated whether their own low-cost 4G devices will include similar features.

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The biggest drawback of the JioPhone, which the incumbents will undoubtedly try to exploit, is that it will not support WhatsApp, the most popular messaging service in India, with around 200 million users.

The question of net neutrality
India's established operators have also been quick to claim that RJio is violating the principle of net neutrality -- which holds that network operators should not discriminate against particular Internet services -- by providing SIM-locked handsets with limited applications.

While they have yet to lodge a formal net-neutrality compliant against RJio, one could be in the offing.

Net neutrality remains a very controversial issue in India. Last year, Facebook was forced to withdraw a service called Free Basics, which bundles Internet services with mobile tariffs, after Indian authorities took a dim view of the scheme.

— Gagandeep Kaur, contributing editor, special to Light Reading

danielcawrey 9/18/2017 | 1:21:56 PM
Access This is all about access. 

I'm all for $40 headsets if they are getting into the hands of folks who've never had a phone before. That's the whole point, right?
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