The Economics of Bharti Airtel’s 7777 offer on the iPhone 8

Bharti Airtel announced that it will sell high-end smartphones online with instant financing.

The phones, including the iPhone 8, will be available at low downpayment and bundled monthly packages, which will make them more or less free of charge.

The model was first tried by Reliance Communications several years ago. The company had, at the time, given unlimited 3G, voice and SMS at Rs 2,500 per month while offering high-end phones at negligible EMIs to attract new users.

Airtel’s latest effort is also similar, but with the aim of retaining its high-end users by entering into multi-year contracts with them.

If you’ve already decided to buy an iPhone, then Airtel’s offer amounts to giving you 30 GB data and unlimited calls and messaging in India for free when you buy it from them.

Instead of spending Rs 60,000 — the current online price of the phone — at one go, you might as well as go for the Airtel’s scheme. Under the scheme, you will pay Rs 7,777 upfront and Rs 60,000 in installments over a period of two years.

Even if you don’t take the free data and calls into consideration, the deal is equivalent to buying an iPhone on EMI at an annual interest rate of 10.95% — which is less than what many credit card companies charge.

In other words, you are only paying for the device and the interest cost, and nothing for the calls and data.

Moreover, the customer also gets free damage insurance.

Airtel has tied up with HDFC Bank for the scheme, which will cover more and more high-end smartphones, the company said.

“Airtel’s Online Store launch is part of Project Next – Airtel’s digital innovation program aimed at transforming customer experience across all of its services and touch points,” the company said.

It said it will invest up to Rs 2000 crores in digital innovations to improve customer experience.

“Airtel’s Online Store is an integrated digital platform aimed at making it easier for customers to upgrade to smartphones they always aspired for, without the constraint of high put-down prices and cumbersome financing schemes.

“All smartphones on the platform will come with down payments that are a fraction of the market price of the device and the convenience of easy monthly instalments with a built in postpaid plan,” it said.

It said the financing will be seamless and simple. It is not clear if the user needs to have a credit card — as was the case in Reliance Communications’ offer — to be eligible for the EMI scheme.

“The entire Online Store journey is digitally enabled, right from purchasing the device to instant financing and plan activations, all within a few clicks over a computer or a smartphone/tablet. The device will get delivered to the customer’s doorstep,” Airtel said.


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One thought on “The Economics of Bharti Airtel’s 7777 offer on the iPhone 8

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