Airtel on Wednesday had announced the launch of an entry-level 4G smartphone at an ‘effective price’ of Rs 1,399 in tie-up with handset maker Karbonn while newcomer Jio offers its 4G featurephone Jio Phone at a security deposit of Rs 1,500. Now, Idea and Vodafone, which are in the process of a mega-merger to create the country’s largest telco, are set to join the race to woo the pool of 500 million mobile users who do not have smartphones. Sources at both Lava and Karbonn confirmed talks with mobile operators. They are looking to finalise deals before Diwali.
“We’re in discussions with all three telcos but plans have not been finalised,” said Gaurav Nigam, product head at Lava. He refused to name any telco his firm is in talks with.
Sources said the homegrown company said they will not bring down the prices of its existing models but will work out enticing new offers in partnership with the telcos. Vodafone and Idea did not respond to ET’s mails as of press time Thursday.
Vodafone India has a pact with Chinese player itel for feature phones but sources said the new alliance would be for a low-end 4G smartphone. Analysts said that while smartphones offer touch and Android features, upgrading customers may prefer to have a smart feature phone than a low-end smartphone.
“One may find it easier to migrate from a 2G feature phone to a 4G feature phone than switch to a smartphone because of the change in hooked up experience for the customer,” said Satyajit Sinha, research analyst at Counterpoint Research.
He said caveats like down payment of $40 and three year period are hurdles since most change phones every two years. Analysts at Morgan Stanley, however, expect Airtel’s new phone to compete effectively with Jio Phone in the high-end feature phone user segment. “We see the Airtel 4G smartphone offering as an attractive proposition,” it said in a note to clients on Thursday.
Analysts at Deutsche Bank Markets Research said that Airtel’s offer was timely, would accelerate subscriber additions and underlines the importance of a good user experience on smartphones rather than feature phones.