Cellular users will soon get free handsets upon commitment to a particular operator. The biggest global system for mobile service companies are now planning to bundle handsets in their services in the Reliance Infocomm style.

BPL, Escotel, Spice Communications and RPG Cellular, who joined ranks recently under MobileFirst, are giving final shape to an agreement with handset makers Nokia and Samsung. The idea is to rope in entry-level subscribers across circles.

The scheme has been in vogue in Europe for quite some time. It will be introduced in India to counter Reliance Infocomm's free code-division multiple access handsets under the Dhirubhai Ambani Pioneer Offer.

Rajan Swaroop, chief executive officer of Escotel Mobile Communications, said: "We are looking at the various options of bundling handset and airtime. The new tariff plan with handsets will be available this year."

However, the government will levy a 15 per cent charge if cellular players sell handsets. The Cellular Operators' Association of India had urged the government to abolish the tax and was awaiting a decision, Rajan Mittal, joint managing director of Bharti Enterprises, said.

He said the scheme would take a few months because of regulatory issues. "The present structure does not permit the operator to bundle handsets with airtime because the government charges 15 per cent tax on the revenues earned," Mittal said.

Umang Das, managing director of corporate affairs at Spice Communications, said the four operators were evaluating whether to bundle handsets and airtime for three years or for a shorter duration.

The operators are under pressure to offer such a scheme because Reliance Infocomm is offering free CDMA handsets worth Rs 10,500 or more to entry-level subscribers committing themselves to the company for three years.

This route was pioneered by European operator Vodafone, in which customers got a free base model of a GSM handset on buying six months of airtime.

However, with low airtime rates and a large number of high-end handsets available in the market, it will be difficult for Indian GSM operators to offer this bundled scheme for a shorter duration.