The Times of India reports that multiple sources are confirming that Microsoft is offering the Windows Phone OS for free to Lava and Karbonn.
The two Indian OEMs were part of 8 new OEMs that signed up to produce Windows Phones at Mobile World Congress 2014.
"For our planned Windows Phone handsets, we are not paying Microsoft a licence fee. The company is obviously exploring new models for Windows Phone. It must have realized that the older model where it licenced the OS did not work out well, even with Nokia’s support," a senior executive with an Indian phone company told Times of India.
"Free Windows Phone is part of a strategic partnership. For both Microsoft and us, it is an experiment. Windows Phone still doesn’t have lot of appeal in the market but now that it doesn’t have any licence fee, it becomes easier for us to experiment with it," said another senior executive.
Microsoft did not comment on any specifics, but a spokesman said:
"We have extensive programmes to help our partners build great devices. Our licensing model allows us to partner with OEMs across the world."
It is expected other OEMs will be able to take advantage of similar deals.
Manasi Yadav, a senior market analyst at IDC said the "free" Windows Phone will definitely help Microsoft.
"If Microsoft has decided to waive the licence fee for Windows Phone, it is great news for local phone makers. Local phone makers are comfortable with Android. They are still not sure of the appeal of Windows Phone. If the OS is free to use, they will feel more confident while experimenting with it in the market.”