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Big News : BSNL to team up with Lava, Micromax to launch Rs 2,000 phone

State-owned telecom operator Bharat Sanchar Nigam Limited (BSNL) is partnering with homegrown mobile device makers — Lava and Micromax — to unveil co-branded feature phones at a close to Rs 2,000 price point with bundled freebies in October. "Our strategy is away from procurement. We are trying to come up with our own bundled phone equipments and in about a month time, you will see co-branded feature phones with various manufactures will come," BSNL chairman Anupam Shrivastava told ETTelecom. Shrivastava said that BSNL was moving towards a collaborative approach and added, "We are tying up with device makers such as Lava and Micromax to come up with own model of co-branded bundled feature phones with very aggressive voice packages." 

The price point of upcoming feature phones, according to the top executive is currently being worked out together with partners, and added that it would be very close to Rs 2,000 with free calling facility. The state-driven operator, however, did not reveal the scale or initial spend, although the alliance will allow the two companies to manufacture co-branded devices exclusively for the BSNL's 10.5 crore subscribers mainly spread across semi-urban locations. Delhi-headquartered service provider has sold nearly 2.5 crore new SIM cards and it has also turned mobile number portability (MNP) positive with close to 7.5 lakh subscribers coming in from rival networks in 2016-17 fiscal. The move, however, a win-win situation for telecom operator and handset makers, is set to disrupt the feature phone segment ahead of Diwali festivity which is falling on October 19 this year.

CyberMedia Research (CMR) in a study pointed out that though the revenues from feature phones constitute nearly 15%, in terms of volume shipments, these devices hold around 57% of the market. The voice-centric quintessential feature phone is still an attractive preposition for semi-urban and rural consumers. A recent study conducted by Mobile Marketing Association (MMA) and Kantar IMRB suggests that 85% feature phone consumers do not wish to switch to smartphones for their next purchase. The two local handset firms— Hari Om Rai-driven Lava and Rahul Sharma's co-founded Micromax — are likely to gain on shipment index with BSNL's stable consumer base, and that too at a time when Chinese rivals such as Oppo, Vivo, Xiaomi and Gionee are doing brisk business in India with more than 50% market pie. Both Lava and Micromax Informatics, however, did not respond to ET's queries.

Bitten by eroding market share, the top executives of local device vendors including Micromax and Karbonn Mobiles recently accused Chinese counterparts of dumping low-cost smartphones making it difficult for them to survive. Domestic players such as Lava, Micromax, Karbonn and Intex including few others that were enjoying nearly 60% of the market share two years ago, have now less than 50% of the combined pie, with Chinese handset players surpassing 51% share in the first quarter of 2017, according to India Ratings and Research (Ind-Ra).

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