Mobile phones at less than Rs 1,500?

The Economic Times reports: Reliance phones to come at less than Rs 1,500

Motorola announced in February 2005 that it is planning to come up with $30 handsets for markets like India. Now Reliance says it plans to work out agreements with its vendors to bring the cost of the handsets to lower than $30.

In markets like UK (and most of Western Europe) and USA, the price of the handsets is brought down by direct agreements between handset manufacturer and mobile service provider. Service provider buys handsets in bulk from the handset manufacturer, then adds his own subsidy and offers the handset at virtually throw-away prices for those customers who go for a post-paid contract with a minimum commitment of an year.

In India, this model is not available directly because of Govt. of India's policies on revenue sharing agreement with the mobile companies. As part of the revenue sharing, the mobile companies are expected to pay a percentage of the topline revenues. However as far as selling the handsets are concerned, mobile companies cannot afford to pay revenue share. It would have to be profit share. So until the Govt. can amend the rules appropriately, the mobile companies may not directly want to get involved in selling the handsets. I am still not sure what sort of deal Reliance and Tatas to with respect to their CDMA handsets.

Bringing the cost below Rs. 1,500 will result in massive growth in the mobile sector. Similar to the handsets, the price of the GSM modules should also come down and should be made easily available in India. It should cost no more than Rs. 1,000.

A GSM module is nothing but the internal circuitry of a mobile phone, available as a sort of printed circuit board device wherein a SIM card can be inserted. This can be used in creating smart devices for vehicle tracking, remote display boards etc.

When I was in Cricinfo, I worked on putting a remote managed scorecard display board powered by a GSM module. The cost of the module was too high. It cost me close to Rs. 50,000 to put a single unit together. It had an LED display. Scores could be sent to this display remotely as SMS messages. The GSM module (and the SIM card) picked the message, cut off the unwanted SMS headers and displayed the score in the LED panel.

I can think of several other applications. A one-way speaking device as a child-tracking and communication device. Using the GSM module a device can be built and stitched to the cloting of the child (or embedded safely in a pouch in the child's dress). The module is so designed that when a call is made to this device, the call is automatically picked up. There is a microphone/speaker set up which is used to communicate with the child. The child need not pick up and press any button. When the call is initiated, the child will have to merely talk to the parent/guardian who is initiating the call. This device can be made very small and weightless, by removing the keypad etc.

In Ararattai Arangam program today on Sun TV, Visu introduced a chap who seems to be using GSM modules (or probably a ripped mobile phone) to come up with several interesting products. If you are reading this blog by chance, please send an email to me! :-) I would like to discuss some ideas with you!