“Airtel is said to be in talks with a number of manufacturers to introduce VoLTE smartphones priced within Rs 2,500”
Bharti Airtel is reportedly considering launching inexpensive, VoLTE-enabled smartphones priced under Rs 2,500. The move is in advanced stages now, and the company is in talks with a number of smartphone manufacturers to figure out the specifics of the deal. The report by The Financial Express also states that the move is being planned to help migrate the 200 million Airtel 2G subscribers to 4G, thereby ramping up the number of users on the operator’s VoLTE network as well as freeing up the 900MHz spectrum band to help contribute to the 4G connectivity.
From the business perspective, the report states that if Airtel can successfully execute this move, it will get an increase of Rs 35-40 on its average realisation per user (ARPU). The company has realised that many of its 2G users recharge for as little as Rs 10 every month, and use their connection for barely anything more than incoming voice calls. This, in turn, affects the company’s ARPU. To prevent this, the operator is planning to make it mandatory to make minimum recharges worth at least Rs 50 per user, up from the recently-introduced Rs 35 minimum recharge value.
Airtel further believes that an increase in its 4G user base will directly translate to better ARPU. At present, roughly 25-30 percent of its users are using the VoLTE network for voice calls. The company now plans to increase that percentage up to 50 percent. A company spokesperson has been quoted by Financial Express as saying that if it does manage to do so, Airtel will then reach “the global average”.
The report further states that Airtel’s deal will be different from what Reliance Jio did with its 4G feature phone. Airtel will reportedly not offer any subsidy to the manufacturer of the smartphone. Instead, there will be cashback offers and other incentives, which will eventually bring the price of the device down by about Rs 1,000. The actual price of these smartphones will be in the range of Rs 2,000-2,500. Additionally, the company has also stated that 40 percent of people who buy new smartphones sign up for an Airtel connection — a market demographic that was significantly lesser last year.
With affordable smartphones tied to its network, Airtel will look to push up all these metrics going forward, and take the fight straight to Reliance Jio. The Mukesh Ambani-owned operator is now the market leader in terms of being a 4G-only network and has reached the massive user base buoyed by the incredibly discounted offers that it began with. While this did lead to a significant outburst of internet across India, it also led to turbulent times for major Indian telecom operators, like Airtel itself.