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Flipkart announces OTT bundling contract for budget smartphones, promises handset refund


Flipkart on Wednesday launched Flipkart Smartpack, a program that bundles cheap smartphones (in the ₹6,000–17,000 price range) with OTT subscriptions, with a refund for the phone purchase price at the end of the contract period if the customer returns the handset. Customers would be required to pay for a bouquet of premium versions of services from providers like SonyLIV, Zee5, Voot, Zomato, Cult.fit and Practo. As long as they stay subscribed for either one year or eighteen months, depending on the tenure of the plan, they will get a refund for some or all of their money into their bank account. A partial refund will be offered if customers choose to keep the phone.

Flipkart says the plan is the first of its kind in the industry, and it certainly is interesting to see such an unusual meld of a telecom operator-level device subsidy melded with OTT bundling. It would be interesting to see how Smartpack works out financially for Flipkart — the blow for the platform is likely softened somewhat by commissions from its OTT partners, and by the fact that not all users may keep paying upwards of ₹800 for services in the hopes of a device refund several months down the line — depending on the mix of services and the cost of the phone, the accumulated spend on the subscriptions may rival the price of the handset itself.

Smartpack is very similar to JioPhone, where Reliance sold low-end KaiOS 4G phones with a 3 year contract. That plan was comparatively rudimentary, and the financial hit to the company upon refund was far lower — the devices themselves cost ₹1,500, and a full refund would only be processed upon the device being returned in working condition 3 years later. And of course, regular payments toward recharges is required for Jio Phone users to receive a refund.

Flipkart said it will offer Smartpack with smartphones made by Realme, POCO, Samsung, Redmi, Motorola, Infinix, OPPO, and Vivo, among others. Availability will be limited to certain PIN codes.

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