Microsoft has been considering offering a free version of Windows Phone to smartphone makers for months now, and it appears the company has signed its first free license deals recently. The Times of India reports that Microsoft is waiving the Windows Phone license fee for two Indian phone makers — Karbonn and Lava (Xolo). Both were recently announced as new Windows Phone makers, and currently create low-cost Android handsets. Microsoft has been reportedly talking to the pair since last year, but agreements to build Windows Phones only came after the license fee was dropped.

While Microsoft refuses to discuss individual license deals, it's clear that any elimination of fees is linked directly to the company's efforts to compete with Google's Android operating system. The Times of India report, cited to sources and anonymous executives, matches similar rumors that surfaced in October. Microsoft was said to be discussing cutting or eliminating the Windows Phone license fee for HTC, providing the phone maker agreed to offer the operating system as a “separate option” on its Android handsets. It appears at least one phone maker, Karbonn, will offer a “dual-boot” phone with both Android and Windows Phone. Microsoft is also cutting license fees for its desktop version of Windows in an effort to entice PC makers to produce more low-cost tablets and laptops.

Microsoft usually charges between $5 and $15 per handset

Microsoft currently charges phone makers a license fee to use Windows Phone, and that charge is thought to be between $5 and $15 per handset. If the Times of India reports are accurate, then it’s likely that Microsoft is dropping the fee in specific growth markets to increase the number of Windows Phone handsets in the market. Elimination of a license fee could potentially be offset against marketing efforts that Microsoft usually offers Windows Phone makers.

Microsoft is now planning to release Windows Phone 8.1 in the coming months, allowing phone makers to bring low-cost handsets to market. Changes include dual-SIM support and on-screen buttons in an effort to make it easier for Android phone makers to modify their devices for Windows Phone. Microsoft is also helping smaller manufacturers, stores, and operators create white-label Windows Phone devices with low specifications and low prices via a web-based hardware portal.

Thanks, redsnowfox!