Idea Cellular has flagged net neutrality concerns about Reliance Jio's proposed 4G phones, saying it will only allow the apps of the operator's choice and that it will also launch a slightly expensive handset as a counter to it.

"One of the concerns is about net neutrality. It will not allow most of the apps which a customer prefers and the choice of apps may not work because it is forcing consumers to use an individual operator's apps," Himanshu Kapania, the managing director of Idea Cellular Limited, the third largest telco operator, said in an analyst call.

Kapania further said it remains to be seen as to how the proposed Jio phone, which does not have features like a smartphone, serves those wanting to browse the Internet. "While clearly it has an appeal for customers with voice usage, what appeal does it have for customers who have an Internet requirement, we will have to wait to see," he said.

He said the Aditya Birla Group company, which is being merged with larger rival Vodafone, is working with handset makers to launch a phone that will be slightly expensive, but offer customers the freedom of choice.

This new handset will give all the choices to a customer, including to choose the operator of his/her choice, popular applications like Google, Facebook or Whatsapp, Kapania stressed. It can be noted that net neutrality is a very touchy subject when it comes to telecom services worldwide and had snowballed into a major controversy in the country last year.

Later, social media giant Facebook had abandoned its plans of giving Internet to rural masses because of concerns on selectively offering the Internet. The telecom watchdog, Trai, has supported net neutrality and has undertaken a consultative process to define the same. Kapania said the company wants the new handset to come in at around Rs 2,500 apiece, but made it clear that Idea will not subsidise the phone.

The Jio offering, unveiled before the Reliance share-holders' annual general meeting earlier this month, comes virtually free for a customer by paying a security deposit of Rs 1,500. The deposit will be refunded after three years of usage.

The Mukesh Ambani-led company is offering unlimited voice and data to its customers with prices starting as low as Rs 153 per month. Kapania said the Jio phone comes with a new operating system, has a smaller screen-size and does not offer touchscreen, as against the prevalent smartphones where 97 per cent are on the Android operating system and have an over four-inch touchscreen.

"We are looking at how much features can be brought down, how much bill of material can be brought down (to reduce prices) and test consumer response in each of these," he said, adding market research efforts will also go into understanding if they are fine using any other operating system. In the early 2000, after the then Reliance Infocomm launched an aggressive offering under the Reliance Mobile brand, the telcos had successfully worked with the handset makers to lower handsets prices and abate competitive fears. "Both the handset manufacturers and telecom operators need each other to make sure that the offering to the consumer is strong enough when you have to make a choice between a bundled offer and a telecom operator with a locked handset," Kapania said.

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