2017: The year of the bundled 4G smartphones

Key Highlights:

• Smartphones 'effectively' priced in the Rs 2,500- Rs 1,500 range were released in 2017.
• Monthly recharges above Rs 150 are a must with these phones.
• JioPhone was aimed at capturing the rural market.

When the youngest player in the telecom industry, Reliance Jio unveiled its most challenging weapon after ‘freebie’ season concluded, it would seem that other operators followed suit. Though this trend picked up mid-year, it was easily one of the most lasting trends in the telecom sector and unleashed a motherload of monthly recharges that came at the side of ‘affordable’ smartphones.

After a year in the sector, Reliance launched its JioPhone, which was aimed at hitting rural markets with its sachet plans, 4G VoLTE network and ‘effectively’ zero price.

“Remember that even an entry-level 4G smart phone will cost between Rs 3,000 - 4,500. Today, I am delighted to announce that JioPhone will be available to all Indians for an effective price of – Rs 0,” Mukesh Ambani, Managing Director at Reliance Industries said adding, “JioPhone is effectively free for Jio customers.”

A closer look at the phone revealed that customers would have to pay Rs 6,000 to own the phone. It had a Rs 1,500 refundable deposit and other charges amounting to Rs 4,500 in total monthly recharges.

However, Jio wasn’t the first ant at the picnic of bundled data handsets. In May 2017, Airtel tied up with Micromax to offer its Canvas 2 smartphone with added benefits.

"Micromax Canvas 2 will come with one year of unlimited Airtel to Airtel calling, unlimited data at no extra cost for both existing and new Airtel customers," Shubhajit Sen, Chief Marketing Officer, Micromax said.

The phone was priced at Rs 11,999.

Vodafone India had also offered free data to the buyers of Nokia 3, Nokia 5 and Nokia 6.

Post the launch of the JioPhone other operators like Vodafone, Airtel and BSNL have launched 4G enabled feature phones and smartphones. Though the phones are in a similar price range, monthly recharges under the schemes vary.

Airtel tied up with Karbonn and Celkon to offer smartphones at an effective price of under Rs 1,500.

Each of these phones came with a compulsory monthly recharge plan of Rs 160, if the subscribers wanted the cashback offered at the end of the lock-in period.

Micromax teamed up with BSNL to offer its Bharat-1 for Rs 2,200 with an additional Rs 97 monthly recharge. It also partnered with Vodafone to offer the Bharat2 Ultra for Rs 999 and monthly recharge of Rs 150 for three years.

Vodafone and itel mobile recently launched the A20 smartphone 'effectively' priced at Rs 1,590.

And although Idea Cellular was rumoured to sell its own feature phone priced under Rs 2,500, the company has yet to announce new developments on this.

The main purpose of these phones was to drive up subscriber base, primarily from rural areas.

At the end of the June quarter, TRAI data revealed that Idea had the highest share of rural subscribers at 56.39% of its total. While Vodafone and Airtel had 54.77% and 49.73% respectively.

Only 24.38% of Jio’s total subscriber base stemmed from rural areas.

As on October 31, 2017, TRAI data showed Airtel had 14.53 crore, Vodafone had 11.63 crore, Idea had 10.51 crore and Jio had 3.6 crore rural subscribers.

This trend of bundled handset phones is expected to carry on well into 2018 but it may only drive up the market for second hand phones if not found feasible.

Also Read: 

• Monthly recharges under bundled handsets to drive market for second hand, refurbished phones
• Can Mukesh Ambani's Reliance Jio force rural India to do what other telecom companies couldn't?