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NEW DELHI: Telcos must focus on driving affordability of smartphones by providing incentives to consumers to trade-in their feature phones and also remove barriers like language to spur migration towards high-speed data networks, say analysts and industry<\/a> experts. They added that plain vanilla bundling of devices with services or merely subsidizing the cost of phones alone won’t bring results and telcos needed to innovate more. They were speaking in the aftermath of Google<\/a> partnering with India's two biggest telcos to make smartphones more affordable in the country.
Both Jio and Airtel have joined hands with internet major Google to find solutions to drive feature phone to smartphone migration. While Jio’s approach was to co-develop a so-called “affordable” smartphone, JioPhone Next, Airtel plans to explore more options with Google to bring down the cost of the device by involving various ecosystem partners.
Analysts said that vanilla bundling of devices with services or merely subsidzing the cost to an extent will not bring results, rather they need to innovate more.
“...user awareness, free data to lock-in and incentives to trade in featurephones, that has happened in LATAM and SEA should happen...The devices also need to worked closely to remove barriers like language, ruggedized etc,” Tarun Pathak, associate director at Counterpoint Research told ET.
IDC’s research director Navkendar Singh said that the prime focus for telecom operators should be to bring the total cost of ownership down over lifetime along with the upfront cost. “They need to drive affordability both in devices via tie ups with brands and plans specific for this base. Additionally, they need to provide market benefits of being a connected consumer - drive content and apps which can help that base.”
Singh said that there is a need to educate this subscriber base on various smartphone use cases such as agriculture, education and skill learning and help is reducing anxiety around using a fragile device like smartphone vs featurephone they currently use. “All these need are critical to unlock this huge base and need to be driven systematically.”
“For consumers at the bottom-of-the-pyramid seeking to join the digital economy, it’s the 3Vs - voice, video and vernacular, that matter,” Prabhu Ram, Head – Industry Intelligence Group at CMR told ET.
Ram said that smartphone OEMs will also need to solve for features as well as affordability to make the value proposition compelling for consumers to upgrade from feature phones to smartphones.
Analysts believe that the Google deal will allow Bharti Airtel<\/a> to come up with smartphones bundled with new services customized software, which will help the telecom operator entice users to migrate from feature phones to smartphones. They, however, said that Airtel will have to rely on its hardware partners to enable overall device affordability, which is going to be challenging at a time when supply chain issues are persisting at the global level.
Bharti Airtel CEO Gopal Vittal clarified that it has no plans to build its own smartphone, rather it will partner with OEMs to bring smartphone offerings to the market.
The Sunil Mittal-led telecom operator is focusing on lending and alliances for smartphone affordability and will bring software capabilities for cashback and incentives. It wants to partner with device makers and ecommerce companies for availability, Airtel CEO Gopal Vittal said, adding that Airtel is using its own data models to predict which customer is going to upgrade.
\"Our strategy is to drive smartphone adoption...we are not keen on the subsidy game, but we want to be competitive in the market. We have developed software to target devices with incentives to minimize the cost,\" Vittal said.
Vittal said that Airtel brought \"Mera Pehla Smartphone\" cashback program and ran pilots with lenders to bring down costs.
\"We have software capability to monitor EMis on devices. we have targeted incentives for customers who are likelt to migrate. which will drive smaartphone adoption,\" he added.“We are focusing on faster smartphone adoption. We have done well to drive 80 million from feature phone users to smartphone. We have seen it resulting in a jump in ARPU for Airtel,” he added.