24/03/2017 10:31 AM IST | Updated 24/03/2017 12:23 PM IST

The Huge 4G Feature Phone Market Is A Big Opportunity For Indian Phonemakers

Will Micromax, Jio and others rise to the challenge?

Reuters Staff / Reuters
A Reliance employee demonstrates Jio LYF phone at their headquarters on the outskirts of Mumbai, India, June 1, 2016. Picture taken June 1, 2016. REUTERS/Clara Ferreira Marques

The entry of Reliance Jio as a major telecom service provider last year spurred a tariff war that has made 4G (or 4th generation) services much more affordable for users. As a result, many users are now in the market to buy cheap 4G enabled feature phones. With Indian smartphone manufacturers facing declining sales and stiff competition, an obvious potential growth area for them is 4G enabled feature phones.

According to a report released by Counterpoint Research, around 400 million feature phones were sold worldwide last year. Meanwhile, the growth in smartphone sales almost came to a halt with just a 3 percent year-on-year increase.

The report also states that because of the 4G revolution in India, the demand for 4G enabled feature phones in the country could be as much as 60 million phones this year alone. The Indian market has the potential for 200 million 4G feature phones in next five years, the report added.

Rural areas in India are still largely untapped and service providers such as Jio could quite possibly offer a bundle of VoLTE (Voice over LTE) enabled feature phones, along with a Jio SIM and free calling services.

In fact, there were reports last year to the effect that Reliance was planning to enter the feature phone market with devices for a selling price of just ₹1,000. Lending credence to the reports was a recent announcement by Qualcomm that it will be making a 4G feature phone chip that listed Jio as one of the partners. The chip, called Qualcomm 205 Mobile Platform, announced by the company supports 150 Mbps of download speed, 50 Mbps of upload speed, and accommodates WiFi and NFC functionality.

"Being a market leader in LTE technology, Qualcomm understands the space pretty well as compared to rest of the competition. As a result, it can tweak its offering by understanding how the entry level offering can be used especially in emerging markets where local brands are striving for differentiation," Counterpoint analyst Tarun Pathak told the online news portal, BGR.

Meanwhile, Micromax is set to launch Bharat 1 and Bharat 2 4G VoLTE feature phones. The phonemaker has loaded the phones with mVisa and Transerve wallets for digital payment. With a price point of under ₹3,000, Micromax is aiming to sell at least 5 million units of the phones in the coming six months.

Other Indian phonemakers are eyeing the market as well. Last month, Lava announced the Lava M1 4G feature phone, priced at ₹3,333. According to reports, Intex too is mulling over launching more phones in the segment.

No word yet on whether any Chinese phone manufacturers are thinking about launching sub-₹5,000 smartphones or whether Nokia is looking to cater to the Indian consumer in this segment.