Spice fires up mass mobile market with Rs 800 phone

B K Modi-controlled Spice Mobile is all set to launch its GSM phone for Rs 800 this month. Branded as the 'People's Phone', the handset, a very basic model, doesn't have a display screen.

The phone also lacks the SMS function unlike the inexpensive CDMA mobiles from Reliance Communications and Tata Indicom. Spice officials believe the company will sell around one million units in India and 10 million globally over the next 12 months.

In an effort to expand its coverage across rural India, where about two-thirds of the country's people live, the company plans to distribute its handsets through grocery stores, fertiliser and seed outlets and railway station kiosks.

"There is no other way to reach the rural masses but through retail outlets. We will keep the phone's packaging quite simple with no technical jargons to confuse the user," said Kunal Ahuja, CEO, Spice Mobile. The mobile vendor plans to target railway passengers initially to market the phone.

"According to our estimates, we should be able to add 22,000 new outlets through this new distribution strategy," he added.

"Already, one in five people in India owns a mobile phone and with the domestic telecom market bursting with affordable handsets, we expect to create a new market of first-time users who just need the mobility of a wireless phone and not necessarily the frills like SMS or a visual display," said Ahuja.

Value-added services, such as voice dial and voice-based interactive voice response (IVR) services that would help rural users to avail information on education, health and agriculture, are also being planned by Spice.

"We are working out the prices for the same. We are aware that these IVR-based infotainment services have to compete with the present call rates and generate revenues for the operator, too," Ahuja added.

Spice is reportedly also working on various variants of the People's Phone, including models that could be priced even below Rs 800. The company is expected to announce partnerships with multiple GSM mobile operators to bundle the phone with GSM connections.

The company is also planning to export the phone to Asia Pacific countries, Latin America, Europe and South Africa. Various language variants of the People's Phone are also expected, although the company will start with phones supporting Hindi, English dialects.

Spice is also working on operator-driven solutions for the phone that will enable free calls in lieu of voice-based advertisements along with voice calls.