Indian operators finally «packaging» devices to drive data use

Shiv Putcha/Ovum
25 Aug 2011

Reliance Communications and Airtel, two of India’s leading mobile operators, have launched new tablets. They are branded the Reliance Tab and the Beetel Magiq, respectively. While the Reliance tablet is own branded, the Airtel tablet has been launched by Beetel, a sister company under Bharti Enterprises.

The Tab and Magiq boast impressive prices, at $280 and $215 respectively. They come armed with Qualcomm Snapdragon processors, with the Tab having an 800MHz processor while the Magiq has a 1GHz processor. Both tablets sport the Android OS (2.3 Gingerbread for the Tab and 2.2 Froyo for Magiq). The Tab is produced by ZTE while the Magiq is made by Huawei.

These tablets are worth noting because they signal the strong intent of India’s mobile operators to drive 3G adoption beyond the strata of high ARPU users to the mass market. Moreover, they represent fresh evidence of a downward trend in the hardware pricing of phones and now even tablets that is happening in a parallel universe far removed from the high-octane publicity cycle surrounding the latest Apple and Android device launches.

Indian operators are finally “packaging” devices to drive data adoption

In a report last year entitled “3G in India: operator launch strategies,” we recommended that Indian 3G operators should look to subsidize devices in special cases. The basis for our argument was that operator support and involvement would be essential for the launch of affordable 3G devices that would take 3G services mainstream.

Indian operators are still clearly loath to take on any additional costs via subsidy in what is a hyper-competitive environment. However, we are pleased to see that they have been very proactive in offering devices with bundled data allowances and other freebies that are designed to offset the initially high average selling price (ASP) of the device.

A recent example is the launch of the iPhone 4 by Airtel and Aircel in India where both operators offer voice, SMS, and data bundles at tiered monthly rates instead of offering a subsidy for the device. Both operators have also introduced prepaid offers as they know that adoption among India’s huge prepaid base will be crucial for success.

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