Gopal Vittal says Airtel will not get into subsidizing phones

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Mukesh Ambani caused the biggest stir in the Indian telecom industry with Reliance Jio. Having shaken up the telecom industry quite heavily, the after effects still continue amongst incumbent operators. Continuing its stride, Ambani recently launched the first 4G VoLTE feature phone in India, the JioPhone. This launch has invited responses from competing telcos on how to tackle this new venture by Reliance Jio. One of Jio’s biggest rivals, Airtel has now shared its statements on the launch of JioPhone.

The panel discussion at Airtel’s first quarter earnings call included some bits about what Airtel aims to do regarding the JioPhone. A question raised by Sachin Salgaonkar from Bank of America, was about the company having any plans of collaborating with handset manufacturers to possibly launch a 4G feature phone when its VoLTE services are rolled out. Airtel will roll out its 4G VoLTE services by end of March 2018.

Airtel’s CEO Gopal Vittal, replied saying that although the telco partners with devices for offers and such, it “has no intention to get into is subsidizing devices, manning the device inventories and running these devices like they belong to us”. He also highlighted that “with the launch of the new feature phone, VoLTE feature phone is that this is a new segment that is likely to open up”.

It seems clear from Vittal’s statement that Airtel will not be getting into launching a 4G feature phone. But the company does embrace this new segment in the market and believes that it will be beneficial. Vittal says, “We will work with all the device companies to encourage this. And of course, as this happens, there is going to be increase in consolidation, which always benefits a leader like us, because the customer then consolidates their spend behind one SIM.”

Reliance Jio’s JioPhone will be available for sale in September for which pre-bookings will start from August 24. With the JioPhone, Ambani aims to bring a smartphone’s capabilities to a feature phone. Although the JioPhone has been unveiled, details are still scarce on what features would be available. The JioPhone poses a threat to both handset makers and telcos at the same time. Similar to Airtel’s statement, Idea Cellular said that it will not subsidize handsetsbut is working to lower the cost of handsets.

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