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Airtel has no intention to get into subsidizing devices: CEO Gopal Vittal On JioPhone launch

Reliance Jio Phone

“We do not brand handsets on our own. We do not subsidize. We do not manage the inventories. We work with different device players to bundle,” Gopal Vittal, MD and CEO of Airtel India said when asked about JioPhone’s launch during a recent analyst call. As per Vital’s response, Airtel will purely perform as a telecom service provider and will not look at manufacturing devices to take on Jio.

“I want to clarify the difference between bundling versus discounting and subsidizing,” Vittal added. He said that the company will bundle “with different device players” to take on Jio’s feature phone launch. He stressed on the fact that Airtel has “no intention to get into is subsidizing devices, manning the device inventories and running these devices like they belong to us. That is something that we do not like doing.”

Vittal added that the impact of JioPhone will be felt on the VoLTE segment, and Airtel is currently working on rolling out VoLTE on its network in the next 6-9 months. He, however, pointed out that a full-fledged VoLTE launch, won’t make much difference on the user’s end. The only advantage of VoLTE is the fact that customers can continue to use data while on a call, he added.

“From a customer’s perspective voice is voice. And so whether the voice is riding on a 2G network, 3G network or 4G network, it is still voice…if a customer is sitting on a 4G layer, they do not have to toggle back and drop on to a 3G or a 2G layer. They can still be sitting on a 4G layer doing a simultaneous data reception plus a voice session [using VoLTE],” Vittal said during the call.

Net Neutrality issues with JioPhone

Jio is now a telecom service provider as well as a manufacturer of devices via two brands–LYF and JioPhone. JioPhone runs a Linux based mobile operating system called KaiOS, as pointed out by Economic Times, and its isn’t clear whether the phone supports SIM cards of other operators. LYF devices support SIM cards of other operators. But JioPhone is being promoted and sold differently by the Mukesh Ambani led telco: The phone will come pre-installed with Jio Apps which includes payments, video on demand, streaming app etc. Along with the phone, users can get unlimited data, free voice/video calls and a subscription to Jio apps for Rs 153 per month.

However, there is no clarification from Jio on whether the phone restricts downloading or installation of apps from the open Internet. From a Net Neutrality perspective, if Jio restricts users to only a certain set of apps developed by Jio or approved only by Jio, then it is equal to blocking or termination of apps without user choice. TRAI banned differential pricing of apps by ISPs/telcos in February last year, but that ruling was applicable only on networks; whether or not the differential pricing is applicable on devices, is yet to be discussed by the regulator. More on this here.

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