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Local phone makers may benefit most from telco battles

LiveMint logoLiveMint 28-09-2017 Rozelle Laha

The immediate and surprise beneficiaries of the airwave wars (between Reliance Jio on the one side, and Bharti Airtel and Vodafone-Idea on the other) are Indian phone makers such as Lava International Ltd, Micromax and Intex Technologies.

These companies, hurt by the onslaught of Chinese mobile phones such as Vivo and Oppo, are now looking at sales growth of as much as 40%, thanks to their partnerships with telcos to provide feature phones or low-cost smartphones bundled with data packs.

“The packs are incremental opportunities for us to not just reach out to consumers at the bottom of the pyramid but also convince them to switch handsets and try new handsets.

We are also trying to be innovative in our feature phones segment, which starts at Rs 800,” said S.N. Rai, co-founder and director, Lava International.

The rush to launch feature phones capable of basic internet browsing was set off by Reliance Jio’s announcement of a 4G feature phone (priced at Rs1,500, which is returned to the buyer after three years) on 21 July.

Micromax, Lava International and Intex Technologies are working with telcos Bharti Airtel Ltd, Reliance Jio, and Vodafone to roll out low-cost smartphones with bundled data packs at affordable rates. Lava International is also in talks with telcos to introduce bundle packs for feature phones.

For instance, the Micromax Canvas 2 handset comes with unlimited calls and 1 GB 4G data per day for a year on the Airtel network and all Lava 4G and VoLTE-enabled phones come with unlimited calls and 4G data for three months on the Jio network.

Lava expects a 10% growth on account of such initiatives.

“Given that we are targeting consumers who are already using one handset and not first-timers, 10% growth is a big number for us,” said Rai.

Similarly, Intex Technologies is hoping to achieve a 30-40% increase in sales, driven by the packs alone, against a sales growth of 20% last year.

“The bundled packs are currently on 4G smartphones. Our key markets are north and western India. We are in talks for bundled offers for feature phones too,” said Nidhi Markanday, director and business head, Intex Technologies.

“Bundled voice and data packs with low-cost smartphones sweeten the deal for first-time smartphone buyers,” said Anshul Gupta, research director, Gartner.

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