The concept of offering free portable computers bundled with wireless Internet connections has been kicked around for a while, but not many have gone ahead and done it. Till now. Reliance Communications, a large telecom carrier in India, says that it will be giving away free netbooks for those who sign up for its two-year wireless Internet service. It has teamed up with Intel, Acer, Asus, HCL and Lenovo in order to make this happen.
Netbooks are highly portable versions of laptops that are typically powered by Intel’s Atom or Via Technologies’ chip. They are being viewed as the next big thing and are already logging robust sales. (I like to call them cloud computers.) Intel has placed a big bet on this technology trend. This is an announcement that brings the handset economics to the computer business — a major shift in how computers have been viewed — till today.
This application of the wireless industry business model (subscription) to the computing business means that we may finally see computer penetration go up in emerging economies. It is not easy for people to buy expensive computers in the emerging economies, but these smaller netbooks that can be attached to a keyboard, mouse and a monitor can help overcome those barriers.
The new offer holds hope for Intel specifically. It can help the chip giant find success for its Atom-platform and turn it into a new engine of growth. ABI Research projects that there will be 200 million mobile Internet devices sold in 2013 and half of them will be powered by Atom. For Intel, which has been struggling to get a toehold into the wireless industry, this might be the best way.
In order to get a free netbook, consumers will need to sign a two-year deal for Reliance NetConnect that will cost about 1,500 rupees or $30 a month and currently runs on the older 1xRTT technologies.
The $30-a-month offer is still too expensive, and Reliance might need to lower prices on Internet access. Of course, given the competitive nature of the Indian mobile market, don’t be surprised to see similar announcements from other major mobile carriers such as Bharti Airtel, Vodafone and Tata.
That would ensure mobile data prices decline rapidly. But till then Reliance can sign up customers quickly and lock them into two-year contracts, giving the company a platform on which to sell its 3G services to its customers. Reliance will transition to 3G technologies soon. The Indian telecom regulator recently cleared the way for 3G networks to be set up in India. Reliance is also in the process of moving away from CDMA to GSM-based networks.
Update: As outlined in our comments, Reliance joins Orange Slovekia and Carphone Warehouse in UK in offering Broadband-subsidized laptops and netbooks.