Bharti Airtel CEO demands cheap smartphones, OTT payments

BARCELONA, Spain--Sunil Mittal, chairman and managing director of Bharti Airtel, called for the GSM Association to launch an ultra-low-cost smartphone program to help build mobile broadband in the developing world.

In a keynote speech at the GSM World Congress, Mittal recalled that the GSM Association set up the Emerging Market Handset program more than a decade ago to get terminal vendors to break the $50 price barrier for plain-vanilla mobile phones and said he would like to see a similar program created to encourage the uptake of smartphones in emerging markets.

"India and Africa need to get the $50 tablet," he added.

In a panel discussion following his speech, Mital suggested that leading operators in emerging markets could collaborate on a tender for 100 million inexpensive smartphones for their customers.

His fellow keynote speakers agreed that low-cost smartphones would help spread adoption of mobile broadband in emerging nations.

"We need to have the right device available at the right price," agreed Santiago Fernandez Valbuena, the chairman and CEO of Telefonica Latin America.

 "The price on smartphones is the most important enabler," said Vimpelcom CEO Jo Lunder, who noted that in Russia, the smartphone penetration is only about 10 percent.

Mittal and the others also took up the popular mantle, at least among mobile operators, of railing against over-the-top (OTT) Internet players for using up precious mobile network resources. He suggested that companies such as Google, YouTube and Facebook should have to pay some type of interconnect charges to underwrite their use of mobile networks. He likened such charges to tolls for use of a broadband highway.

Without such charges, mobile customers will have to pay more for mobile Internet services, which Mittal noted would highly unpopular because consumers have come to expect that Internet services are free.

"It really is a paradox" that despite investing billions of dollars in their networks, mobile operators are getting blamed for capacity problems caused by OTT players sucking up the bandwidth, said Lunder. He noted that all positive Internet developments get attributed to companies that are riding for free on the networks, but the networks never get any credit for enabling such services. Lunder suggested there is a need to "educate the value chain."

Mittal said profit margins are being crushed by OTT services. This, in turn, harms the entire telecommunications industry because operators no longer have enough money to pay substantial sums for network upgrades, causing infrastructure suppliers to sell equipment at a loss in order to sign up business. "If you look at the virtuous cycle, it is crumbling" because Internet OTTs are not paying their fair share, he said.

For more:
- see this Cnet article
- see this ThinkInnovation post

Related articles:
Telecom Italia CEO highlights 'burdens' created by OTT players
Report: MNOs need to become OTT players
Report: Operators lost $13.9B due to OTT messaging
Maravedis: Are operators prepared to leverage the mobile cloud?

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