The Indian telecom market is possibly one of the most dynamic markets in the world. It is a living, breathing organism that changes its colours faster than a chameleon against a rainbow. So much so, that just within a span of six months, Symbian’s dominance in the smartphone market was completely demolished by Android! That is just how tumultuous our country is, trends spread like wildfire and even though half the people on the street didn’t know what “Android” actually was, it was still labelled a better and newer option so people flocked around it.

The problem here is that a majority of the market is dominated by low end, underpowered devices and as we all know, Android on such a device is not exactly the best experience in the world. For the Indian consumer, sticker price is everything, hence most of them are discouraged by the fact that they would probably have to spend more than Rs. 15,000 for a “mobile phone” even though they might be able to afford it, and end up going for a far lower quality model instead. Therein lies the rub, the man on the street still thinks of these devices as phones, which is a grave folly, as we all know that they can do a whole lot more! They are basically miniature computers that can perform most of the functions that a desktop PC can perform, but in a much smaller form factor.

Time for sunsidized plans

Time for subsidized plans

Hence, something needs to be done to prevent that initial “sticker-shock” and cushion the economic blow of buying a high-end smartphone by spreading it out over a few months. Of course, one could opt for EMIs, but the procedures for going through the whole process are so convoluted that most consumers wouldn’t bother. So what we need is an easily accessible contract with a third party of sorts; that would give you the smartphone at a nominal price, based on the understanding that you will use their services and eventually turn over a profit for them.

This isn’t some much-fabled, far-fetched system that I speak of, it is basically referred to as carrier subsidizing and it is highly popular in countries like the United States. You pay a network service provider like Airtel a nominal sticker price for the handset itself, and in doing so, you sign a post-paid contract with the provider giving you a certain amount of free minutes, messages and data to use each month for a monthly fee, that would eventually recover the cost of the handset as well as a tidy profit for the carrier over the length of the contract.

Imagine how tempted customers would be to buy a phone like the Samsung Galaxy S2 for an upfront fee of Rs. 5000 followed by Rs.1250 per month for two years which would also give them 250 free minutes as well as 350 free messages and 512MB of data each month. Such a deal would considerably soften the initial financial hit of owning a top tier smartphone and turn it into a small diversion from the monthly pay check instead.

It isn’t exactly a foreign concept in India itself; Reliance and Tata Docomo have applied similar schemes on low end feature phones with varying degrees of success. MTS even offers the MTS Pulse, which is an HTC-made Android phone, available for free under a one year contract. But the fact is that neither the really popular networks nor handset manufacturers have come out with such plans and advertised them vehemently. If they did, it could potentially shake up the Indian telecom market as much as the arrival of Android did a few years ago.

You can connect with Harshit Passi on Twitter @hrshtpassi

Publish date: February 29, 2012 12:56 pm| Modified date: December 18, 2013 9:43 pm

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