New Delhi: India’s basic phone is refusing to hang up. As rising smartphone prices put upgrades beyond some buyers’ budgets, feature-phone manufacturers are adding digital payments and other services to devices whose biggest attractions remain affordability, battery life and simplicity. The pressure on smartphone affordability has intensified since September. Counterpoint Research’s October 23 report showed shipments below Rs 20,000 falling 47% year-on-year in July–September, partly because price increases pushed models into higher bands. Overall smartphone shipments declined 20%. That does not establish a shift towards feature phones, but it provides a sharper backdrop to why their users may postpone upgrading.Arijeet Talapatra, CEO of itel India, Transsion Holdings, described the feature-phone category as increasingly driven by replacement demand. Affordability remains the biggest draw, alongside durability, multi-day battery life and ease of use.“Feature phones continue to serve a distinct and practical need: they offer reliable, essential connectivity at a price and level of simplicity that smartphones cannot always replicate,” he said. Ravi Kunwar, vice-president and CEO, HMD India and APAC, estimated that around 200 million people still use 2G feature phones. That represents an existing user base, rather than annual handset sales.“Consumers are looking for better connectivity and more features, but that does not always mean they want to move to a smartphone,” Kunwar said.Digital payments are expanding what compatible basic handsets can do. PhonePe announced its UPI 123Pay service on August 31, using an SMS-based system that does not require mobile internet. Its current terms allow transfers, merchant payments and QR scanning on camera-equipped feature phones, with one bank account enabled at a time.At launch, PhonePe named Nokia, HMD, Lava and itel as handset partners. It also announced an activation helpline supporting English and 12 Indian languages. Bill payments, recharges and Aadhaar-based onboarding were described as forthcoming; their rollout needs confirmation before being presented as available.More capabilities, however, have not produced consistent shipment growth. CMR’s April–June 2026 data showed 2G feature-phone shipments rising 5% year-on-year while 4G models declined 43%. Itel held 38% of the 2G segment, followed by Lava at 30% and HMD at 20%. These are second-quarter figures, not a measure of current festive demand.Talapatra nevertheless expects migration towards 4G to accelerate. He said itel was expanding digital-payment support and larger displays, while inexpensive 2G handsets retained a role as backup calling devices.HMD similarly sees better connectivity and payments as ways to extend the category’s usefulness. Older users value familiar controls, while some smartphone owners want a break from notifications and social media. Kunwar identified digital detox as another reason for buying basic phones, although he provided no figures establishing its scale.For manufacturers, the task is to make these devices more useful while preserving the low cost and simplicity that keep customers buying them.
