Micromax, Intex and others game for sub-Rs 2000 4G smartphones

The government’s call for highly-affordable 4G smartphones – priced as low as Rs 2,000 – has rung a bell with at least two domestic manufacturers, though experience with these phones may be patchy as components used for camera, processors and battery may not be cutting-edge.
Karbonn and Intex, two homegrown manufacturers, have said that they are “in a position” to meet the low-price criteria – spelled out recently by NITI Aayog – but “it depends on variables” such as size of the order and the government’s advocacy to push the products. NITI Aayog spoke about the aggressive price point in a recent meeting with local manufacturers that included Karbonn, Lava, Intex and Micromax.
“We will be in a position to come out with a prototype of the low-budget product in a month’s time. But the government needs to clarify some key issues, including the support it will lend to the project,” said Pardeep Jain, MD of Karbonn Mobiles.
As the government pushes digital payments agenda in line with demonetisation efforts, smartphones are being perceived as key instruments to drive home the point of Digital India. There is an increasing feeling that apart from cashless transactions, a smartphone in the hands of the poor can also help deliver services around health, education, farming and employment.
Jain said while working towards a pre-designated price point, it is critical that the final product does not fall short of consumer experience. So the battery capacity, camera clarity, processor capability, screen size and build quality must be able to satisfy users.
Nidhi Markanday, director at Intex, said the company is already selling smartphones priced at Rs 2,000. “But these are devices that run on 2G networks. As the reach of 3G and 4G networks increases, and depending on demand and support extended by the government, we are ready to manufacture phones that are compatible with them.”
At present, a 3G device from Intex sells for between Rs 2,500 and Rs 5,000, while a 4G phone costs between Rs 4,000 and Rs 10,000. “We have the capacity to make a 4G phone at Rs 2,000. But, it depends on scale of the order and how fast 3G and 4G networks penetrate rural markets,” Markanday said.
Officials from Micromax and Lava did not comment on the issue.
Pankaj Mohindroo, president of Indian Cellular Association, said instead of pushing phone makers to provide cheaper handsets, the government should try and ensure an easier, enabling duty regime for budget smartphones. “We will not be able to bring substantially higher product experience through cost reductions. I think these things should be left better with market forces. You need to facilitate a regime of lower taxes, such as zero VAT on phones priced under Rs 5,000.”
The push for cheaper smartphones is also coming at a time when telecom regulator Trai has floated a consultation paper which talks about providing 100 MB of free monthly internet data to those living in rural areas. It has proposed that the cost for this be funded by the Universal Service Obligation Fund (USOF).