Airtel to take on Reliance Jio with a sub-Rs 2,000 Android smartphone

While the JioPhone comes in a feature phone form factor and is locked to Jio network, Airtel will be introducing a low-cost smartphone running Android.

Airtel is working on an ultra low-cost smartphone that will be compatible with 4G VoLTE network. (Reuters)

In a bid to compete with Reliance Jio, Airtel is working on an ultra low-cost smartphone that will be priced under ₹2,000, according to sources. Expected to launch soon, the smartphone will be compatible with 4G VoLTE network.

While the JioPhone comes with Reliance Jio branding, Airtel is unlikely to do so. It may be recalled that Airtel's CEO Gopal Vittal had said in one of the company's investor calls earlier this year, "I want to clarify the difference between bundling versus discounting and subsidising. We do not brand handsets on our own. We do not subsidise. We do not manage the inventories. We work with different device players to bundle."

"Firstly, I think we have traditionally and historically, been of the view that the device market must be treated as a really open ecosystem. We partner with all devices. One of the things that we have stayed away from, and we have no intention to get into is subsidising devices, manning the device inventories and running these devices like they belong to us. That is something that we do not like doing," he had said.

According to sources, the smartphone will come with a 4-inch display. It is expected to run on Android 7.0 Nougat out-of-the-box and powered by a quad-core processor coupled with 1GB of RAM. The smartphone will come with dual-SIM support and FM Radio support.

Reliance Jio had disrupted the telecom market with its aggressively priced data plans and free voice calls for lifetime over the VoLTE. Jio's aggressive plans prompted the incumbent players to match the competition. Reliance Jio, however, has raced to more than 100 million users since its commercial launch in September, 2016.

In August this year, Reliance Jio launched a smart feature phone, called the JioPhone. The company is offering the device with a security deposit of ₹1,500, which is refundable after three years. The JioPhone works only with Jio SIM, and comes pre-loaded with a suite of Jio apps such as JioTV and JioCinema among others.

According to a recent data by Telecom Regulatory Auhority of India (TRAI), Airtel has 23.7% market share, retaining the spot as the leading telecom operator in the country. Reliance Jio has 10.83% market share and is at the fourth spot followed by Vodafone and Idea.

It's also worth noting that Airtel earlier this month started its 4G VoLTE services. Airtel is the second telecom operator in the country to launch VoLTE services after Reliance Jio.