Reliance Jio phone: Idea Cellular raises Net Neutrality fears over 4G VoLTE feature phone

The country’s third-largest telecom operator, Idea Cellular, has raised Net neutrality concerns over the VoLTE-enabled feature phone by new entrant Reliance Jio as the handset does not allow apps other than its own to work on the phone. Besides, the Aditya Birla Group firm, which is against giving any sort of subsidy on mobile phones, is working with handset manufacturers so that they can offer smartphones in the range of Rs 2,500 to compete with Jio’s 4G feature phone. “Idea for the last 21 years does not sell handsets, other than a small quantity that was acquired to initiate the sale of 3G four years back, and we will continue that stand. We have no intention to subsidise handsets,” Idea’s managing director Himanshu Kapania said in an analyst call on Friday. He explained that Idea is working with the handset industry to bring down the cost of handsets by reducing the bill of material (BoM) rates, which will help in closing the gap with the 4G feature phone price. The effort is to ensure that smartphone prices are brought down to reasonable levels.

Citing an example, Kapania said the prices of CDMA handsets were Rs 500 and Idea worked with Nokia to bring down the GSM handset costs from Rs 5,000 to Rs 2,500-2,000 price point, which helped in consumers choosing the GSM networks. Attacking Jio, he said, “When the customer is given the freedom of choice of being able to use multiple networks as and when he desires, our belief is that the customer will choose the freedom of choice over locked handsets. There are also other concerns over the feature phone that has come in. Largest being the Net Neutrality concerns, which will not allow most of the apps, which a customer prefers, and the choice of apps will not work because it’s forcing consumers to use individual operator apps”.

Elaborating on Idea’s strategy to counter the VoLTE-enabled feature phone, he said, “So given this, we believe if we focus on bringing down the BoM and bringing down smartphone cost to Rs 2,500 or closer, we will be able to neutralise the impact of these feature phones. But, we will have to wait and see how these things unfold”.

On the company’s VoLTE plans, Kapania said Idea is in the final phase of closing the contracts with the suppliers and the planning for the launch is also being finalised. “The exercise (VoLTE launch) takes about 6-9 months. Separately, testing of multiple handsets also has been initiated. So we are very hopeful to be able to launch our VoLTE services in the early half of 2018 calendar year and all efforts are on for the same,” he added.

Idea Cellular on Thursday reported a standalone loss of Rs 617 crore for the three months to June, bigger than the Rs 430 crore in the January-March quarter bruised by the tariff war in the sector after Reliance Jio launched free data and voice services last September.