Global Economics

Apple iPhone Tunes into India


While many "unlocked" handsets already dot the subcontinent, Bharti Airtel and Vodafone Essar will officially launch the smartphone in the fall of 2008

Earlier this month, two telecom operators—Bharti Airtel and Vodafone Essar—announced their plans to launch the Apple iPhone in India. Market buzz is that both subscribers will launch the iPhone around the country's Diwali festive season in October 2008, when consumer spending is at an all-time high.

"There is a certain thrill and euphoria around owning iPhone," said Rajiv Makhni, technology managing editor of NDTV, and anchor of local TV program Cell Guru on NDTV 24X7, a leading news channel in India. "The phone has a seriously large user base in India." Cell Guru is a TV program featuring mobile phones and technology.

Makhni told ZDNetAsia in a phone interview that he receives 2,000 e-mail messages a week for Cell Guru and 20 percent of the e-mail pertain to the iPhone.

"And even though the iPhone has not been officially launched [in India], 10 percent of the people I know already own an iPhone," he said.

Harish Bijoor, brand-domain specialist and CEO of Harish Bijoor Consults, said in an e-mail interview: "With two leading operators launching the iPhone, the Indian consumer will have a wider plank to choose from."

Vodafone has signed an agreement with Apple to sell the iPhone in 10 of its markets around the globe. According to a statement released by Vodafone, its customers in Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey, will be able to purchase the iPhone for use on the Vodafone network.

Bharti Airtel, on the other hand, is bringing the iPhone to India through an agreement with its affiliates Singapore Telecommunications (SingTel), Globe Telecom and Optus. Through this agreement, SingTel will debut the iPhone in Singapore, the Philippines and Australia later this year.

Bharti Airtel is the largest GSM mobile operator in India, servicing nearly 62 million mobile subscribers, while Vodafone Essar is the second largest GSM operator with over 41 million subscribers.

With two operators bringing the iPhone into India, Bijoor said "upgrading from the mobile user's existing handset to the iPhone will be that much easier".

Shaky hacked iPhone users

Meanwhile, existing users of "unlocked" iPhones in India are somewhat nervous about their fate.

"I am actually scared that the iPhone is now coming to India through the official route," Richie Chatterjee, a senior employee of a leading BPO (business process outsourcing) service provider in Gurgaon, told ZDNetAsia. Chatterjee has been using the hacked iPhone for six months.

"I have heard that in Bangkok, when the iPhone was officially launched, users of unlocked iPhones found their phones jammed," he said, adding that he is hoping this will not happen in India.

"The existing iPhone user base in India is very large. Apple has a lot more to gain if they embrace us," Chatterjee said. "They could sell so many services and applications to existing iPhone users."

Since he acquired his iPhone, Chatterjee found five other colleagues who had also purchased the Apple device from the grey market.

Makhni said: "The iPhone is a great branding plank. Customers can change service providers just to get the iPhone."

Concurred Bijoor: "Once number portability is allowed in India, the allure of the iPhone may draw more subscribers to Bharti Airtel and Vodafone."

"High-end users of niche telecom players in India, who are already salivating about the prospect of an iPhone in his hand, will wait for such a possibility," he said.

Smaller, regional operators could suffer due to number portability. "Until number portability is allowed, India' mobile subscribers—who are not customers of Bharti Airtel and Vodafone—may see their own provider as a hurdle to an 'official' iPhone upgrade," Bijoor said.

While Airtel and Vodafone may grow their subscriber base due to pending iPhone sales, the clear winner will be Apple.

"It will enter the Indian market on the strong footing of two large operators," Bijoor said. "This is very unique to any country of Apple's entry.

However, Makhni said, Apple will need to work on its after-sales service network, which is today the company's weak point in the country.

India clocks in some 8.3 million handsets and over 5 million mobile subscribers each month.

Bijoor said: "Even if a fraction of the 8.3 million handset buyers shift to the iPhone each month, it will be a big number on which to build mega business plans."

However, Makhni noted that much will depend on the price at which the iPhone is launched.

At present, an 8GB iPhone costs around 16,000 rupee (US$400) in the grey market. Some media reports have pegged the price of the iPhone at around US$590 (25,000 rupee) when it launches in India.

If the price tag is high, this can revive the grey market for mobile phones in India, Makhni said.

Provided by ZDNet Asia—Where Technology Means Business

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