Editor's note: Yesterday Firstpost published a post titled 'iPhone 5c for Rs 2,500 EMI: Is RCom risking it all with Apple contract?'. The story has been taken down due to some factual errors. Below is a clarification on the RCom - iPhone India deal.
On the Internet speed is everything. But that doesn’t mean accuracy is any less important. In our piece yesterday: ‘iPhone 5c for Rs 2,500 EMI: Is RCom risking it all with Apple contract?’ we argued that Reliance Communications’ ( RCOM) announcement that Indian customers could pick up the iPhone 5s at a monthly payment of Rs 2999 for 24 months (of the iPhone 5c for Rs 2599 for 24 months), which included unlimited calls, text and 3G data, was the first move by an Indian telco to adopt the US carrier subsidy model. As is commonly know, this model has made iPhone the most popular smartphone in the United States.
It’s now clear that the RCOM offer isn’t very different from earlier EMI schemes by Apple in India, and the only addition is the calls, text and data component at a subsidised rate. Reliance Communications is not taking the risk of customer delinquency here, but the credit card issuing bank will do so. In essence, if you want to avail of what seems like a mouth-watering offer, you should have a credit card issued by a few specific banks, the entire amount is swiped on your card at one go and you repay the bank in monthly installments with interest.
That also means that it’s not just a credit card from specific banks that you need but you also should have an unused credit limit to the extent required by the offer—so, if you have just Rs 30000 left on your credit limit, you may not be allowed to take up the offer. This offer is certainly better than the erstwhile EMI schemes promoted by Apple in India since it also brings in calls, data and text but it isn’t radically different in the sense that the telco takes the risk of customer delinquency. In essence, it is old wine in an old bottle, but with a glitzy new wrapper on the bottle.