iPhonAsia comment: As the post below notes, iPhone may soon be launched through a new carrier in India – BSNL. Will this launch be accompanied by significantly different pricing and distribution strategies? The crystal ball says “perhaps yes.” And who knows … we might even see a new model iPhone in 2009 that will be ideally suited for markets with vast numbers of pre-pay customers … such as India and China.
Why has iPhone thus far encountered a teipd reception in India?
#1 reason is price … India is a price sensitive market and The 8GB version costs Rs. 31,000 ($710) while the 16GB iPhone is priced at Rs. 36,100 ($825). The corresponding prices in the U.S. are $199 and $299. Given this price disparity, arbitrage possibilities abound. At the 30,000 Rs. price level, “suppliers” in India have healthy incentive to acquire iPhones in the US for smuggle/re-sale in India’s black-market.
Reason #2 is lack of handset subsidies in India (another variation on the pricing issue)… Unlike in the U.S. and other countries, carriers in India do not subsidize handsets. As a point of comparison, AT&T subsidizes the iPhone price in the U.S. and recovers the subsidy amount from subscribers during a two-year contract “lock-in” period. The ARPU (average revenue per user) for AT&T is north of $50. In India, Airtel has an ARPU of Rs. 357 ($8.16) and Vodafone’s is Rs. 350 ($7.99). The slim ARPUs in India leave little room for handset subsidies.
Kolkata, The country’s largest telecom operator, Bharat Sanchar Nigam Ltd (BSNL), will introduce Apple’s iPhone for its subscribers across the country by December along with the launch of the third generation network, according to SK Chakravarty, chief general manager of Calcutta Telephones. “On September 30, we will have a meeting of the circle heads where we may take a decision on making iPhones available to our consumers,” said Chakravarty.
One of the issues that the national BSNL meet will discuss is regarding the roll out of the 3G network by the end of this year.
BSNL and MTNL are the first two government operators to get 3G licence. At present, iPhone is available for Vodaphone and Airtel customers only. “iPhone is a 3G phone and we think that unless we have a 3G network, its full potential can’t be utilised by customers,” said Chakraborty. BSNL is investing around Rs 2,500 crore in creating the 3G network, where the share of east and north is Rs 1,000 crore and that of west and south is approximately Rs 1,500 crore.
Ericsson will roll out the network for east and north, while Alcatel and Huwei will be responsible for west and south, respectively. According to a senior BSNL executive, by the end of this year, all the district headquarters in the country will have the 3G-network connection. “We will work towards this and there should not be any problem to achieve the target,” he said.