We all know that Reliance Jio Telecom Providers has recently launched its ultra-cheap 4G feature phone into the market. Faced with the challenge, Idea Cellular on Friday said it is working with handset makers to bring down the cost of handsets.
Idea Cellular has flagged net neutrality concerns about Reliance Jio’s proposed 4G phones, saying it will only allow the apps of the operator’s choice and that it will also launch a slightly expensive handset as a counter to it. The Aditya Birla Group company set to be merged with its rival Vodafone and made it clear that it will not subsidize handsets.
This new handset will give all the choices to a customer, including to choose the operator of his/her choice, popular applications like Google, Facebook or Whatsapp, Kapania stressed. It can be noted that net neutrality is a very touchy subject when it comes to telecom services worldwide and had snowballed into a major controversy in the country last year.
“The practical solution that we are working on is to work with the handset industry and work with them to be able to bring down cost of handsets by bringing down the bill of material, so that the gap of the announced price of Jio feature phone versus a smartphone can be brought down to reasonable levels,” its managing director Himanshu Kapania told.
“One of the concerns is about net neutrality. It will not allow most of the apps which a customer prefers and the choice of apps may not work because it is forcing consumers to use an individual operator’s apps,” he added. Kapania said the ideal price point for a handset will be Rs 2,500.
Kapania further said it remains to be seen as to how the proposed Jio phone, which does not have features like a smartphone, serves those wanting to browse the Internet. “While clearly, it has an appeal for customers with voice usage, what appeal does it have for customers who have an Internet requirement, we will have to wait to see,” he said.
“Given the fact that this (Jio announcement) has happened, and it is going to be distributed in large volumes, our belief is that we need to work with the handset industry and introduce similar phones in the marketplace,” he said. This will be an “affordable phone” which will allow customers the choice of dual SIM, selection of 2G and 4G networks, signing up with telecom operators of choice and to use applications of choice, he said.
Later, social media giant Facebook had abandoned its plans of giving the Internet to rural masses because of concerns on selectively offering the Internet. The telecom watchdog, TRAI, has supported net neutrality and has undertaken a consultative process to define the same.
“With the launch of the 4G feature phone, not only the existing telecom operators will get affected, it will add a big threat to the handset suppliers,” he said, adding that the biggest market of 2G phones will “vanish”. While we have no intention to subsidize handsets, both handset manufacturers and telecom operators need each other to make sure that the offering to the consumer is strong enough when you have to make a choice between a bundle offer and telecom operator with a locked handset,” he said.
Smartphone priced at `2,500 will give Net access to users which Jio feature phone will not. The Mukesh Ambani-led company is offering unlimited voice and data to its customers with prices starting as low as Rs 153 per month.
Kapania said the Jio phone comes with a new operating system, has a smaller screen-size and does not offer a touchscreen, as against the prevalent smart phones where 97% is on the Android operating system and have an over four-inch touch screen. Kapania also claimed that “one of the concerns over Jio is about net neutrality.
Kapania also said that the company is looking at multiple options of monetizing its tower assets and will look at all options, including an IPO for Indus Towers. In the early 2000s, after the then Reliance Infocomm launched an aggressive offering under the Reliance Mobile brand, the telcos had successfully worked with the handset makers to lower handsets prices and abate competitive fears.