NEW DELHI: Bharti Airtel on Wednesday launched a 'low cost' 4G smartphone in partnership with Chinese handset maker Karbonn Mobiles to counter Reliance's 'free' JioPhone offer.

The phone will 'effectively cost' Rs 1,399, for which customers will have to make 36 continuous monthly recharges of Rs 169 and get two cash refunds -- Rs 500 after 18 months and another Rs 1,000 after 36 month, Airtel said in a statement.

The dual-SIM device has 8GB memory, Wi-Fi, Bluetooth and GPS.

The Airtel plan comes just when billionaire Mukesh Ambani -led Reliance Jio has started delivering to pre-booked customers a low-cost 4G-enabled smart feature phone on payment of a one-time refundable deposit of Rs 1,500.

"The customer needs to make a down payment of Rs 2,899 for the 4G smartphone and make 36 continuous monthly recharges of Rs 169. The customer will get a cash refund of Rs 500 after 18 months and another Rs 1,000 after 36 months, taking the total cash benefit to Rs 1,500," said the statement.

Those not wanting to opt for the Rs 169 bundled plan will have to do recharges worth Rs 3,000 within the first 18 months to claim the first refund of Rs 500, and recharge by another Rs 3,000 over the next 18 months to claim the second refund of Rs 1,000.

Airtel said the partnership with Karbonn is the first of several partnerships that it plans to have with mobile handset manufacturers to "bring highly affordable bundled 4G smartphone options to the market".

Under this partnership, the Karbonn A40 Indian is being offered to customers.

The Google Certified Karbonn A40 Indian has a full touch screen plus dual SIM slots, and offers complete access to all apps on Google Play Store, including YouTube, Facebook and WhatsApp.

Raj Pudipeddi, Director Consumer Business & CMO, Bharti Airtel said, "Airtel's aspiration is to digitally empower every Indian with high speed data access."

Airtel, he said, plans to partner with multiple manufacturers to bring affordable smartphone options to the market and build an 'open ecosystem' of low cost devices.

"This is yet another step in our ongoing journey to deeply understand customers and bring innovation that delights them," he said.

Karbonn Mobiles Managing Director Pardeep Jain said: "Through this association, we aim at strengthening our reach with the consumer that resides at the heart of smart telephony.

"The real strength of our consumer base being an Indian smartphone brand is towards empowering every Indian with smart telephony and through this association we want to bring to our customers full blown smartphone experience at a price of just Rs 1,399."

The latest salvo from Airtel - India's largest operator with subscriber base of over 281 million - promises to raise the competitive heat in the telecom sector, just ahead of the festive season.

The delivery of about six million Reliance JioPhones started in the second half of September, although the company has not provided an update of the deliveries made so far.