We have written in our earlier blog that the trend of overseas service providers offering the phones under contract is not catching up in India. Here, we have not seen any service provider offering a phone under contract with their services. In Europe and USA, majority of the devices are sold under contract for a period of 24 to 36 months and cost of the device are minimised in this deal as service providers recover majority of the cost of hardware by rendering services. The consumer is benefitted because he does not have to pay upfront full amount of the device and is required to pay in 24 or 36 instalments depending on the plan chosen or offered. But in this case, the consumer cannot switch the service to another service provider.
We understand that Reliance Communication (RCOM) and Google have entered into a two-year deal according to which all Google endorsed android mobile devices from companies like Samsung, HTC, Sony and LG will come with the RCOM’s third generation, or 3G, mobile connection with 1 GB of free downloads for the first six months. This is the smart move by RCOM to increase its subscription base of high-end users.
This arrangement will not be exactly on the models of foreign companies like Verizon in USA and Orange in Europe because Google-endorsed devices will work on networks of all other mobile operators and consumers will have the option to switch to other operators. In other words, these devices will not be sold under contract. We wish one day this trend of getting the devices under contract becomes reality in India. We hope that RCOM will make the bundling offer quite attractive for customers to buy devices and remain with the company for longer duration.
As part of the agreement, RCOM, the country’s second-largest telco by subscribers, will launch a 30-crore campaign for Google Android products starting Saturday. Google has also committed to an equivalently valued campaign on its online platforms. The advertisement, that depicts the android logo Green Bot going blue, will include platforms like augmented reality and will continue till the T20 World Cup.
In the past, Aircel and Bharti Airtel had exclusively launched Apple’s iPhone in India as part of similar tie-ups. Airtel retained a sizeable number of the customers that bought the phone, while many who bought it from Aircel switched to other networks. Idea Cellular also offer packs with Android-based handsets from ZTE and Huawei.
Industry experts estimate that more than 200,000 such phones will be sold in India over the next two years and that RCOM will be able to retain two-thirds of these customers on a long-term basis.