Spreadtrum, Jio promise 4G feature phones at Rs1,500

A feature phone that supports 4G technology for as little as Rs1,500 may be hard to imagine, but Chinese mobile chip maker Spreadtrum Communications has promised just this, saying it is working on reducing starting prices by at least half from the current levels.

"We are working on a technology that makes a Rs1,500 4G feature phone viable. We have already started concept promotions to our partners," Spreadtrum Communications' India head Neeraj Sharma told The Economic Times.

Prices of 4G feature phones (or phones without touch screens) from Indian manufacturers such as Lava and Micromax start at about Rs3,000. Both these handset makers, besides Karbonn, plan to reduce prices of such phones further.

Reliance Jio Infocomm, a pure-play 4G operator, is also planning to bring in affordable 4G VoLTE feature phones through its sister retail firm that may be priced under Rs1,500, according to ET citing industry executives aware of the matter.

Shanghai-based Spreadtrum Communications, which has seen a steady growth in the baseband chip segment, competes with mobile chip makers such as MediaTek and Qualcomm. Chipset is an integral part of a mobile handset that accounts for a major part of the price of a device.

Spreadtrum Communications has a two-year old partnership with Reliance Industries and has powered its affordable LYF Flame 5 smartphone. It has also powered Lava's M14G-enabled feature phone, which is priced at Rs3,599. The company said that it takes nearly six months between a technology reaching readiness and devices hitting the market shelves.

Financial services firm JP Morgan in its recent finding said that feature phones with 4G capabilities will remain popular in India in 2017, in part due to the boost from faster-than-expected 4G network roll-outs.

"The market has completely shifted from 3G to 4G in the last six months and with a disruptive technology, vendors should attune their go-to market strategies," Sharma said. He said LTE feature phones offering additional value should be packaged in a more attractive way and targeted to be sold in tier III locations and rural areas in tandem with the growing data market.

 Handset makers are focusing on low-cost 4G feature phones to ride on the growing opportunity of 4G triggered by Jio's disruptive data pricing and aggressive rival plans by rivals Bharti Airtel, Vodafone India and Idea Cellular.