Bharti Airtel, the country’s second-largest telecommunications giant by the number of customers, has planned new co-branded handset deals with phone manufacturers as well as packaged data and call time offers.
This is to lower the effective price of a smartphone and preserve its 2G subscribers. This move comes ahead of the launch of the low-cost JioPhone Next in the upcoming Diwali season.
Airtel and Jio: An Old Rivalry
Bharti Airtel has a long history of tariff wars and subscriber base tussle with Reliance Jio. This latest move is significant because it shows Airtel is now ready to oppose Jio head-on.
Airtel is unlikely to give any handset subsidies, unlike arch-rival Jio. The latter is expected to heavily subsidize its next, the JioPhone Next, to keep the price low in an effort to appease Airtel and Vodafone Idea’s 2G users. Airtel has issued a Request For a Proposal (RFP) for phones.
It’s essential to remember that the JioPhone Next has been created in collaboration with Google, and it’s aimed at individuals planning to switch from 2G to 4G connection. Reliance Jio and Google have made significant progress toward introducing the much-anticipated JioPhone Next, the built-for-India smartphone jointly created by the firms, according to a statement released last week by Jio.
Jio, the company headed by billionaire Mukesh Ambani, has postponed the debut of its smartphone from September 10 around until Diwali this year.
What are Airtel’s new plans?
Smartphone manufacturers like Lava, Karbonn, and HMD Global are ready with potential devices and features, complementing Airtel’s new plans. Airtel is looking into these features for a prospective smartphone in collaboration with handset manufacturers. However, nothing has been finalized yet as it is waiting on Jio’s next price and incentives.
According to sources, Airtel’s equipment offering is ready. However, the deciding aspect is the subsidy and whether it will match Jio’s affordable pricing.
Airtel has seemingly worked out the details, but matching the pricing with a subsidy might be tough. However, we can expect the Nifty 50 placeholder to come up with a competitive strategy surely.
Last month, rumors broke that Google had been in advanced stages of discussions with Bharti Airtel for almost one year and that a substantially significant transaction might be in the cards.
The future of affordable telecom services in India
Jio’s intention to give large subsidies on its smartphone might be stymied by a worldwide chip scarcity and subsequent price rise. According to reports, Jio plans to offer the 4G smartphone for Rs 3,500-4,000.
Gopal Vittal, the CEO of Airtel, recently dismissed the idea of giving handset subsidies, stating that the company has a clear understanding of “how to deal with this”, referring to JioPhone Next. According to him, the firm has undertaken pilot trials with Original Equipment Manufacturers (OEMs) for cheap phones, as well as working with banks to provide clients with financing alternatives.
“Having said that, this is a competitive industry,” Vittal added. “We’ll see what’s happening in the market with a combination of good marketing optics, opportunities, and platforms around the locks.”
The initial cost of a decent entry-level smartphone — approximately Rs 6,000-7,000 — is a major impediment for many of India’s new and existing mobile phone users, according to Ashwinder Sethi of consultancy and analytics firm Analysys Mason.
According to Sethi, Airtel needs to decrease the barrier to entry. It can be done through smartphone financing agreements or OEM partnerships for low-cost handsets with good performance. Otherwise, there may be more migration (to Jio), particularly among low-tier prepaid customers.