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Samsung plans handset venture with Reliance?

Korean giant said to be designing $100 TD-LTE smartphone for Reliance Industries, possibly as prelude to JV in India


Published: 8 March, 2013

READ MORE: India | Handset | LTE | Android

There was heavy focus at last week's Mobile World Congress on entry level smartphones for the high growth emerging economies, rather than on the glitzy superphones. Samsung is reported to be staking its claim to the Indian market via a joint venture with TD-LTE operator Reliance Industries (RIL).

In a country where operators remain the primary channel to market for mobile devices and services, and a high percentage of handsets are own-branded, a carrier alliance could be helpful in strengthening Samsung against incumbent market leader Nokia, the powerful Chinese suppliers, and a rising tide of local OEMs.

This does not mean the Korean firm will not be marketing its Galaxy range - which stretches down to midrange models - under its own brand too, but success in India will mean covering a wide range of bases and user profiles.

On Reliance's part, a deal would bring it new devices for a network that, so far, lacks a broad handset ecosystem. RIL was the only nationwide winner of TD-LTE spectrum in India's BWA auction, but has lagged behind others like Bharti Airtel in deploying commercial services. This is partly because, as a new entrant to the wireless scene, it has to start from scratch in several respects, including infrastructure, sites and deals with major device providers. It has been reported to be getting close to its former sister firm, the cellco Reliance Communications, to speed its progress via asset sharing.

For TD-LTE operators in general, device availability is currently well behind that for their FD-LTE counterparts. The biggest driver of TDD smartphones is China Mobile, which recently selected vendors for its massive trial networks, but there are few commercial TD-LTE services in the world yet.

According to The Times of India, RIL is very close to finalizing a deal with Samsung, initially for a low end LTE handset which would probably roam onto 2G for voice and possibly Wi-Fi. It says the Korean firm has agreed to design a handset priced around $100 - close to the fee for a Samsung 3G phone in India, and the cost of which could be financed at no interest. Entry level voice, text and data plans for the phone would begin as low as INR100 ($1.83) a month, to tempt users to migrate from their featurephones - and hopefully increase their spending in future, as they get hooked on mobile web services.

One source who spoke to the Indian newspaper believes this is just the start of a broader alliance. "Samsung will not be just another vendor to RIL, supplying handsets as it was when Reliance Infocomm was launched in 2002. They are seeking a much broader role. A possible joint venture could also be in the offering," said the source.

RIL is expected to soft-launch its LTE network in Mumbai and Delhi around midyear and move to a full roll-out in many urban territories by the end of 2013.

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