Airtel invites RFPs seeking to offer cheaper smartphones

Bharti Airtel is considering joint deals with mobile phone and data and voice package makers to lower the effective price of the smartphone as the company seeks to protect its 2G subscribers ahead of the launch of JioPhone Next.

However, the carrier under Sunil Mittal’s leadership has made it clear that it wants to avoid the subsidized mobile phone game, unlike rival Reliance Jio, which is expected to heavily subsidize JioPhone Next to keep the price low in an attempt to entice Airtel and Vodafone. People familiar with the matter say they are Idea 2G users.

Airtel has posted a request for proposals for mobile phones and manufacturers including Lava, Karbonn and HMD Global have shown interest and are willing to provide possible devices and specifications, they said.

Airtel, Lava and HMD did not respond to inquiries until Monday, while a Karbonn spokesman declined to comment.

Airtel is primarily trying to protect its nearly 120 million 2G users, who may be vulnerable to Jio’s attempts to bring them into its network with an affordable 4G smartphone. Gio claims the JioPhone Next, developed with help from Google, will be the world’s most affordable smartphone, with specs tied to much more expensive devices.

Airtel has also set specifications for a possible smartphone in relation to phone brands, but is awaiting Jio’s pricing and offerings, People said.

Jio recently postponed the launch of its smartphone around Diwali from September 10th.

“Airtel’s offer is complete, but the question is about subsidies and whether they can match Jio’s offer. Airtel has decided on the specifications, but it will be difficult to match the prices to the subsidy for them … but it will make an offer, ”said one of the people.

Meanwhile, some industry analysts said continued component shortages and subsequent price increases could limit the stock on the amount of subsidies Jio could provide. Jio is believed to be planning to sell the 4G smartphone at prices ranging from Rs 3,500 to 4,000.

One interviewee said Airtel will try to capitalize on the market hype created by Jio to bring its mobile phone users to 4G through partner smartphone brands. In the past, the company launched a “mera pehle smartphone (my first smartphone)” initiative that it could revive.

Industry leaders said mobile phone makers would only allocate volumes to the Airtel merger based on the operator’s final bid as they would like to avoid “inventory risks,” especially when the industry faces component shortages and supply delays.

Airtel CEO Gopal Vittal recently said he does not believe in subsidizing mobile phones, adding that Airtel has clarity on “how to deal with it (JioPhone Next).” The company has conducted pilot trials with original equipment manufacturers (OEMs) for affordable phones, in addition to partnering with banks to offer credit options to customers, he said.

“… Having said that, this is a competitive industry, we will see what is happening in the market with a combination of good marketing optics, opportunities and platforms around the locks,” said Vittal.

However, industry leaders said it became difficult to offer loans as lenders were not optimistic about the segment of customers Airtel would target, as most of them would not have a credit history and lenders might not have a reliable mechanism to collect payments. … …

Ashwinder Sethi of the consulting and analytical firm Analysys Mason said the initial cost of a sensible entry-level smartphone – around Rs 6,000-7,000 – is a big deterrent for many of India’s current mobile phone users.

“While Bharti Airtel has mentioned that it will stay away from a subsidy approach, it will need to lower the barrier to entry, perhaps through smartphone funding partnerships or OEM partnerships for low-cost smartphones that offer a good experience. Otherwise, there may be higher churn and also a small proportion of gross add-ons, especially for low-tier prepaid users, ”Sethi added. Now You Read Me