Vodafone, BSNL tie up with feature phone makers

Vodafone India and state-owned Bharat Sanchar Nigam Ltd (BSNL) are tying up with domestic handset makers to offer voice deals on feature phones as they step up efforts to hang on to simple voice and messaging customers who still form the bulk of the Indian market.

Vodafone India, the country's No2 telco, has tied up with Lava and Intex to offer bundled voice plans and cashback with 2G feature phones, while BSNL said it is partnering with Lava and Micromax to unveil co-branded feature phones in October at close to Rs2,000 with bundled benefits such as free calls.

A Vodafone customer purchasing a Lava feature phone can get cash-back worth Rs50 for 18 months on minimum recharge of Rs100 in a calendar month. The credited talk time makes a total bill of Rs900 in 18 months.

Vodafone, through these partnerships, is clearly seeking to protect its voice business, which contributes about 80 per cent of revenue, ahead of its merger with Idea Cellular, India's third-largest telco. Vodafone already has a tie-up with China's iTel.

The collaborations come as Reliance prepares to make its 4G feature phone – JioPhone – which runs only on the Jio network, available during Navratri, which starts on Thursday.

Vodafone is offering talk time worth Rs50 free for 18 months on a minimum recharge of Rs 100 for its consumers who buy Lava and Intex feature phones. The offer is available on about 10 Lava feature phone models.

Of 450 million feature phone users in India, about 250 million have not upgraded their devices in the past one to two years, according to data from Hong Kong-based Counterpoint Technology Market Research cited by The Economic Times.

BSNL's alliances will allow the two companies to manufacture co-branded devices exclusively for its 105 million subscribers spread mainly across semi-urban locations, chairman Anupam Shrivastava told ET. The launch will take place in the run-up to Diwali in mid-October.

India's top telcos Bharti Airtel, Vodafone India and Idea Cellular have a majority of customers that use feature phones for voice services only and proportionally, their revenue from voice is high.

Gaurav Nigam, ?senior VP, head of product, Lava, said the company's partnership with Vodafone will provide customers a cashback amount which is equivalent to the cost of its highest-selling feature phone Captain N1.