India gearing up for bundled offerings and free mobiles

Something different has been happening in the telecom space in the past four months. India found a liking for touch screens and smartphones. Sighting this, manufacturers have found a new opportunity and new markets. Manufacturers like HTC and Samsung have always bet big on India, but it is the global majors like Apple and LG who have renewed their interest in India. Net result: A deluge of smartphones to feed 500 million to 700 million Indian subscribers, depending on who you ask.

With new opportunities comes new competition. Manufacturers were facing a stiff challenge of new models being launched every other day. Indian telecom economy is laissez-faire when it comes to choosing handsets. In order to differentiate, handset manufacturers are tying up with telecom operators to provide bundled offerings. While bundled offerings is nothing new, the offering we have seen in the past four months are tantalizing. Probably a sign of things to come.

MTS Pulse, a free phone

MTS has offered a free smartphone worth Rs. 18,000 (US$400). MTS branded MTS Pulse is first such offering in the country. Like all things free, there’s a catch: subscribers have to sign up for a 12 month plan which would cost Rs. 1,500 per month. MTS Pulse is a re-branded HTC Hero which has less than spectacular specifications when compared with available smartphone choices.  It runs Android 2.1 operating system, 3.2 inch touch screen and a 528 MHz Qualcomm processor. For the cost of Rs. 18,000 a much better Android powered phone was available at the time of MTS’s offer. Yet offering a free handset under the premise of a 12 month data plan is something new for the Indian consumer.

iPhone 4 for free

Apple, which generally has a clearance sale for its products, launched iPhone 4 in India two days ago with much fanfare. Like all things Apple, people got very excited about it. There is one more reason to get excited about other than the phone. The cost at which it is being offered. Apple has tied up with Airtel and Aircel. Airtel has offered 50% discount on iPhone 4 for existing customers whose monthly bill has crossed Rs. 2,000. Aircel has offered the iPhone 4 free with some heavy data plan and a 2-month lock-in period.

The plans above, spending Rs. 1500 to Rs. 3000 per month on a mobile plan is expensive and is clearly targeted for the power users. These ideas are not radical. US is a popular place for stuff like this. Trying out an idea in India has its own challenges. Would India embrace bundled offers? Has the time come?