Reliance Communications is planning to revive the price war in the mobile handsets segment, this time by introducing an internet-enabled mobile phone for Rs 480 ($12) -- the cheapest in the country, if not in the world.
This will be at least three times lower than the existing price of Rs 1,400 ($35) for a low-end internet-enabled handset.
The company, which has been conducting a feasibility study for the last couple of months, is in the advanced stage of launching the handset.
The launch of the handset, slated to be in the GSM category, would coincide with the company's proposed GSM entry, a source close to the development said.
"Low-cost internet-enabled phone is one of the seven major initiatives planned by the company in 2008, and Chairman Anil Ambani is personally overseeing it," the source added.
According to an analyst, RCom had always played the price game, starting with the Monsoon Hungama scheme in 2003. Under the scheme, the company offered monochrome (black & white) handsets for Rs 501 at a time when prices were hovering around Rs 2,000.
The company later launched One India scheme that substantially brought down STD call rates. It also launched the sub-$25 handsets to further boost its presence.
RCom is in advanced stages of discussions with leading contract manufacturers in China, Taiwan and Korea for sourcing the prototype of the low-cost internet phone.
The company intends to place an initial order for 12 million handsets. It will target the 600 million rural population and sell around 1 million pieces a year in the rural and semi-urban areas.
When contacted an RCom spokesperson refused to comment on the specifics of the project. "Initiatives to increase the availability and affordability are among the key pillars of Reliance's growth strategy. The company is continuously looking at innovative solutions to serve the needs of various customer segments with varied needs and tastes," he said.
The company is also looking at roping in the labour ministry that is looking at digitisation of communication technology and making mobile phones affordable to farmers.
The ministry is also looking at working with private companies to enable internet accessibility to farmers and help them use the Net to sell their produce.
Calling the shots