Reliance Jio’s entry has changed the dynamics of Indian cellular market. Its latest announcement to give its customer VoLTE-enabled feature phone with pre-loaded Apps virtually for free has led to Idea Cellular raising the issue of ‘Net Neutrality’; and it is just the beginning of another round of ongoing mobile war between the new entrant and the incumbents…

NEW DELHI, JULY 30. 2017: Days after Reliance Jio announced launch of ‘Jio Phone’ with pre-loaded features, Idea Cellular has raised the contentious issue of ‘Net Neutrality’ accusing the new mobile operator of curtailing freedom of choice of customers.

“When the customer is given the freedom of choice of being able to use multiple networks as and when he desires, our belief is that the customer will choose the freedom of choice over locked handsets. There are also other concerns over the (Jio) feature phone that has come in. Largest being the Net Neutrality concerns, which will not allow most of the Apps, which a customer prefers, and the choice of Apps will not work because it’s forcing consumers to use individual operator’s Apps,” Idea Cellular’s Managing Director Himanshu Kapania said in an analyst call.

Ideal Cellular, which is currently undergoing the process of merger with Vodafone India, is working on a plan to counter Reliance Jio’s plans to give its feature phone for free with Rs.1500 as refundable three-year deposit. Stating that Idea Cellular was against giving any sort of subsidy on mobile phones, Mr. Kapania said they were working with handset manufacturers so that they can offer smartphones in the range of Rs.2,500 to compete with Jio’s 4G feature phone.

“Idea Cellular for the last 21 years does not sell handsets, other than a small quantity that was acquired to initiate the sale of 3G four years back…We will continue that stand. We have no intention to subsidise handsets. We are working with the handset industry to bring down the cost of handsets by reducing the bill of material (BoM) rates, which will help in closing the gap with the 4G feature phone price. The effort is to ensure that smartphone prices are brought down to reasonable levels,” he added.

Mr. Kapania said Idea’s VoLTE plans were on the right track and they were in the final phase of closing the contracts with the suppliers. “The exercise (VoLTE launch) takes about 6-9 months. Separately, testing of multiple handsets also has been initiated. We are very hopeful to be able to launch our VoLTE services in the early half of 2018,” Mr. Kapania added.

The ongoing tariff war between Reliance Jio and three main incumbent players has resulted in Idea Cellular reporting a standalone loss of Rs.617 crore for Q1 of 2017-18, against Rs.430 crore in the January-March quarter. Post Idea’s merger with Vodafone India, which is expected by end of 2018, it will become India’s largest mobile operator.

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