The plan comes despite an indifferent market response to Aakash , the world's cheapest tablet aimed to empower students.
But the plan to locally manufacture the smartphones to make them affordable to large sections of the Indian population would complement the government's recent move to woo the electorate ahead of next year's general elections by giving a cellphone to one female member of every household that has worked for 100 days in 2012 under a rural employment guarantee scheme.
"A fully-functional smartphone is no longer an object of desire but an instrument of empowerment ," the official said. He added that since smartphone affordability remains the biggest hurdle to broadband penetration in India, the world's second largest mobile phone market, the government is exploring ways to encourage the biggest handset makers to produce sub- $100 advanced smartphones on a large scale that will come pre-loaded with the latest entertainment applications and also support mobile banking, telemedicine, education to even farming applications like e-krishi .
The proposal was discussed on July 29 during the first meeting of the joint working group on broadband that is co-chaired by the department of telecommunication's (DoT) additional secretary, Rita Teotia, and ex-Nasscom chief, Kiran Karnik, who currently heads the Confederations of India's Industry's telecom advisory cell.
Flooding the market with low cost "Made In India" smartphones is at the heart of the government's plans to evolve a broadband ecosystem to leverage the Rs 21,000-crore national fiber optic network (NOFN) that goes live next year.
The NOFN will be the principal connectivity backbone for taking internet to the hinterlands to achieve the national target of 175 million broadband users by 2017, compared to a modest 11 million now.
Karnik declined to reveal specifics but said: "A sub-$100 smartphone can be a major broadband driver, especially since large scale penetration will have to be propelled by mobile phones" . Two people present in the meeting , however, said there was an overwhelming view that "industry and government needed to work jointly to make smartphones more affordable" .
This, mainly since the average global price of such devices continued to hover around $130 (Rs 7,800), the main reason why barely 5% of the Indian population has till date upgraded to genuine smartphones despite the country's 70 %-plus telecom penetration levels.
Skeptics, however, argue that low cost alone will not spur mobile phone-driven broadband usage. Shiv Putcha, principal analyst (consumer services) at consultancy firm Ovum said the government needed to develop a broadband ecosystem by working with industry to undertake mass mobile content and applications development in local languages to encourage people living in the hinterlands to use the mobile platform to go online.
He added that India needs to develop a full manufacturing ecosystem along the lines of the Chinese city of Shenzhen, where all involved in the value chain of mobile manufacturing - from the cellphone components/chipset suppliers to the design and display people to the testing and engineering people all work within a common industrial cluster.
Mahesh Uppal, a director at telecoms consultancy firm Com First India, believes broadband penetration will not take off "unless the government explores ways to improve smartphone economies of scale through a combination of regulation and marketing efforts" .
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