Can Lava And Aircel Band Together And Successfully Take On The Big Boys?

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Aircel has announced that they are partnering with local smartphone maker Lava in order to create their own competitor to the Jio Phone. As Reliance begins to commence shipments of the highly awaited Jio Phone across the nation, and news emerges of a possible competitor from none other than Airtel, the entire telecom industry is waiting with bated breath for a fierce battle to play out. Now, Aircel and Lava have also thrown their hat into the ring in an attempt to gain back some ground from their rivals.

According to reports, Aircel and Lava will collaborate on a feature phone which will be priced at a mere Rs 850. The phone will come with an exclusive plan which offers unlimited data, SMSes and voice calls for Rs 153 per 28 days.

As for the handset itself, it will be a feature phone with dual SIM slots. Unlike the Jio Phone, the SIM slots will not be locked and will work with other networks as well. Customers will also be available for a full 100% cashback after a period of 24 months, provided they honour the Rs. 153 per 28 days recharge minimum. Aircel has also confirmed that the cashback will be in the form of actual money, not recharge or subsidies.

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Compared to the competition, Aircel and Lava’s device has some compelling offerings. The device itself is extremely low cost compared to the Rs 1,500 Jio Phone or the rumoured Rs 2,000 Airtel 4G phone. The 100% cashback in actual money is also a very attractive feature. On top of that, the monthly recharge amount is also very competitive with their rivals.

The collaboration between Aircel And Lava makes a lot of sense on paper, as both companies have been struggling as of late. According to TRAI data, Aircel’s share of the Indian market is a mere 7.58%, and their merger with RCom also fell apart recently. Over the past year, they have struggled to compete with the big boys like Airtel, Jio and Vodafone. Meanwhile, Lava has been beset by their own issues. Since Q1 2016, Lava has lost the lion’s share of their business to Chinese smartphone OEMs like Xiaomi, Vivo, Oppo etc.

However, there is one big problem with the Aircel-Lava phone. The phone will run off a 2G network and will only offer 2G data. Now, with 4G adoption in India at an all-time high and emerging reports about pre-5G trials, 2G is obsolete technology. This represents an endemic problem with both Aircel and Lava, who have failed to compete with their rivals on a purely technological level. Due to this huge caveat, the Aircel-Lava phone may lose out to its competition once again.

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