How Airtel's handset bundle betters Jio's feature phone offer

Bharti Airtel has responded to Jio with a very well calculated handset bundle offer that will provide big value to the customers

Bharti Airtel, has just aligned itself with Karbonn – an Indian handset player to launch its unique 4G smartphone offer in India.

The offer consists of an upfront payment of INR 2,899 and subscription to a INR 169/month tariff plan. Customer gets a cash refund of Rs 1,500 and retains the phone at the end of 36 months – resulting in an effective cost of INR 1,399 for the smartphone.

On the other hand, the Jiophone offer consists of an INR 1,500 upfront payment and subscription to a INR 153/month plan. At the end of 36 months, the customer gets cash refund of INR 1500 but has to return the phone to Jio implying zero cost for using the handset. Both the tariff plans are comparable and offer unlimited voice and 0.5GB/day of data.

According to Deutsche Bank Markets Research, Bharti Airtel's offer is timely and it would accelerate subscriber additions, "The Indian telecom market is rapidly consolidating with three remaining weak players struggling to retain subscribers. At end-July/17, Bharti had an active subs-share of 26.6% (271.5m) which compares 15.2% of the weaker operators.

We believe Bharti’s handset bundle would aid in garnering a significantly higher share of the subscribers who are likely switch over the next 12-18 months. We also note that Bharti’s current ARPU (1QFY18) stands at Rs 154 and hence the current offer is unlikely to be dilutive. It is likely that the offer has an element of handset subsidy of around Rs1000 ie Rs 28/month over the offer period (36 months). This implies an effective ARPU of Rs 141/month which is higher than Bharti’s current voice ARPU of Rs 111/month," the research document adds on.