Bharti Airtel has announced a scheme to offer a 4-inch smartphone at an effective price of Rs 1,399 — after cash backs — to take on the challenge posed by Reliance Jio’s Jiophone.

The customer needs to make a down payment of Rs 2899 for the 4G smartphone. He will get a cash refund of Rs 500 after 18 months and another Rs 1000 after 36 months, taking the total cash benefit to Rs 1500.

However, to get this, he or she must make monthly recharges of at least Rs 169.

The refund money is coming from Bharti Airtel’s pocket, rather than that of Karbonn.

Airtel said the current market price of the phone is Rs 3,499.

Unlike Jiophone, Airtel’s phone — Karbonn A40 Indian — will actually support all Android apps, including WhatsApp and Facebook, and comes with Android 7 Nougat and 1 GB of RAM.

It has a built-in storage memory of 8 GB, which can be supplemented by a 32 GB micro-SD card.

It also comes with Dual SIM slots and support for VoLTE. It is not clear if VoLTE support is limited to Airtel’s network or not, as the company said it will support ‘Airtel VoLTE’.

This is an affordable 4G smartphone at the price of a feature phone, the company claimed.

“This is the first of several partnerships that Airtel plans to have with mobile handset manufacturers to bring highly affordable bundled 4G smartphone options to the market and fulfill the digital aspirations of millions of Indians,” it said.

“We are delighted to partner with Karbonn to remove barriers to smartphone adoption and enable millions of Indians to leapfrog to a full touchscreen smartphone experience,” said Raj Pudipeddi, Director – Consumer Business & CMO, Bharti Airtel.

“We plan to partner with multiple manufacturers to bring affordable smartphone options to the market and build an ‘open ecosystem’ of low cost devices. This is yet another step in our ongoing journey to deeply understand customers and bring innovation that delights them.”

In case the customer does not wish to opt for the Rs 169 bundled plan, she/he has the flexibility of doing recharges of any denomination and validity as per individual requirements, the company said.

However, to claim the cash refund benefit, recharges worth Rs 3000 must be done within the first 18 months (to claim the first refund installment of Rs 500) and another Rs 3000 over the next 18 months (to claim the second refund installment of Rs 1000).

In comparison, a Jio user pays Rs 153 every 28 days for three years, which works out to be about Rs 6,000, to be eligible to get a cash back and reduce the price of Jiophone to ‘zero’.

Besides, unlike in case of Jiophone, the Airtel phone does not need to be returned to the company at any point, and the ownership remains with the user.

It said more such deals are coming.

“The partnership between Airtel and Karbonn is part of Airtel’s ‘Mera Pehla 4G Smartphone’ initiative, which is aimed at enabling every Indian to buy a 4G smartphone and get on to the digital superhighway.

“Under the ‘Mera Pehla 4G Smartphone’ initiative, Airtel will partner with multiple mobile handset manufacturers to create an ‘open ecosystem’ of affordable 4G smartphones and bring them to market for virtually the price of a feature phone,” it added.

All smartphones under the ‘Mera Pehla 4G Smartphone’ initiative will be available at leading mobile stores across the country, the company said.

Rivals like Idea Cellular and Vodafone are also shortly expected to come up with similar schemes.

The move by Reliance Jio to launch Jiophone is forcing telecom operators to pick up part of the cost of the device, as is usual in places like the US and Europe.

While in the US and Europe, the subsidy is given upfront, in India, upfront subsidy is not possible as the subscriber may ‘run away’ with the phone after buying it at a low price.

In places like the US, a subscriber is prevented from ‘running away’ or ‘jailbreaking’ the subsidized phone as doing so will impact his or her credit rating, which is required to take any kind of loans in the future.

The system of credit rating for persons is not as developed in India, and people often use dongles and devices issued by one company on another network after cracking the software illegally.

This is forcing Indian operators to give the subsidy only at the end of the contract period, and not at the beginning of the contract period as is usual.

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