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Modi Telstra Limited, the 51:49 joint venture between the B K Modi Group and Telstra of Australia, plans to offer select cellular handsets "for free".

By virtue of a bulk cell phone sourcing agreement with Philips Consumer Communications, Modi Telstra will offer the Philips 'Diga' branded mobile phones to new customers at Rs 6,000 flat, and subsequently, refund the entire sum as airtime discount over the ensuing 12 months.

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The airtime component is to be two thirds of a cellular phone bill. Consequently, Modi Telstra feels the latest offer will not only enhance cell phone usage but also ring in new connections, come 1999.

The company, which is one of the two cellular operators in Calcutta, intends to test the waters through its 'zero-value handset' offer, and thereafter consider similar bulk agreements with Nokia, Ericsson and Motorola.

Modi Telstra Vice-President (Marketing and Strategy) Rajat Jain has been quoted as saying "alliances with other global cell phone vendors are in the offing, though much will hinge on customer response to this scheme and vendor aggressiveness".

Under the terms of its alliance with Philips, Modi Telstra will procure 1,000 Diga model cell phones every month at Rs 6,000 each.

Jain concedes that the decision is "bit of a gamble in the price-sensitive Calcutta market'', especially considering that the company's net incremental cell phone connections each month have seldom exceeded the 700-1,000 level.

But Jain is optimistic. "We believe the Diga will elicit an encouraging response as it is likely to jettison the entry barrier bogey that all high-priced mobile phones pose at present,'' he observed.

Unlike Philips Diga's Rs 6,000 price tag, competitor handsets in the same category are currently priced at roughly Rs 10,000-15,000 apiece.

The decision to source 12,000 mobile phones annually from a single vendor is quite unprecedented. Modi Telstra has lately been collectively procuring a mere 300-400 handsets every month from four principal cell phone vendors Nokia, Ericsson, Siemens and Motorola amid the protracted market downturn.

- Compiled from the Indian media

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