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Apple Inc seems to have finally cracked the mobile handset subsidy model in India. The world’s second-largest smartphone maker has signed a deal with Reliance Communications wherein a user will get the 16GB iPhone 5c and iPhone 5s at zero upfront cost.
The telecom company will offer unlimited voice calls, SMS and 3G data for a fixed monthly fee ranging between Rs 2,599 and Rs 2,999. The subscriber will be locked in to RCom’s network under a two-year contract.
Dishonour fears
This is the first time an Indian telecom company is subsidising an iPhone, although Apple has been trying to convince operators for a while. Indian operators have so far stayed away from this model fearing that subscribers will dishonour the contract by unlocking the phone for use on another operator’s network or to resell it in the grey market.
Since more than 90 per cent of the Indian mobile phone market consists of pre-paid cards, operators have been wary of tracking down defaulters.
RCom has dealt with the problem by restricting the subsidy offer to credit card users, thus putting the onus of subscriber verification on partner banks, including ICICI Bank and HDFC Bank. An RCom spokesperson declined to comment, but industry sources said the company will announce the offer on Friday.
Under the scheme, the 16 GB iPhone 5c, priced without subsidy at Rs 41,900, will be available for a monthly fee of Rs 2,599 while the 5s, priced at Rs 53,500, will be on offer for around Rs 2,999 a month. The 32GB version will come with an upfront fee of Rs 10,992 for 5s and Rs 11,600 for 5c in addition to the respective monthly charges. The 64GB model will be on offer for an upfront fee of Rs 19,992.
While iPhone is also available through equated monthly instalments, RCom has sweetened the deal by bundling in unlimited voice and data plans along with the device for a two-year period.
Rival operator Airtel will also start selling the new iPhones from November 1 but is unlikely to offer a subsidy.
(RCom offer price has been updated after the company's formal announcement on November 1, 2013.)
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