Cut deeper into the countryside with affordable but feature-rich handsets - that seems to be the mantra for telcos today.
Keen to grab market share before Vodafone lowers price points and Virgin enters
MUMBAI: Cut deeper into the countryside with affordable but feature-rich handsets - that seems to be the mantra for telcos today.
Reliance Communications (RCom), for one, seems to be playing that card particularly well.
The objective of the country’s second-largest wireless operator, which last week formed an alliance with Taiwan-based HTC for CDMA handsets, is clear — increase market share before Virgin sets about acquiring customers and Vodafone launches its own low-cost handsets in the market. The industry is abuzz that Vodafone might price its handsets upwards from Rs666, well below RCom’s lowest price point of Rs777.
S P Shukla, president, Reliance Communications said the company had drawn up a massive marketing plan to push its handsets in the rural locations.
HTC, on its part, has set a target of selling one million smart phones in India by 2009. The HTC smart phones are now available in a price range of Rs11,500-34,000, which is competitive to those manufactured by firms like Blackberry and Nokia. Last year, the company sold about 10 million devices worldwide.
Ajay Sharma, country manager (India), HTC said, “We will launch a mobile below the Rs10,000 mark during the festival season in October in India as it is one of the fastest growing markets. Our sales in the second half of 2007 grew by as much as 300% over the first half.”
RCom has a dual strategy in place for the six circles where it has a market share in excess of 25% as against its overall market share of 17.4%, said a research analyst with a brokerage firm.
The company has a subscriber base of 37 million in October 2007 and a wireless market share of 17.4%. It operates in all 23 telecom circles - offering CDMA services in 21 and GSM services in 8 circles.
Devyani Javeri and Arit Chaudhury of Edelweiss research said in a research report that RCom’s GSM entry will give a leg-up to its mobility business by increasing the addressable market, reducing handset subsidy costs (as handsets would no longer be required to be bundled with service offering), and overcoming roaming limitations.
RCom’s GSM venture will enable it to compete effectively with rival GSM operators by lowering the cost of its offerings to new subscribers while effectively targeting customers churning out from rival operator networks, the report said.
According to Indian Cellular
Association estimates, the GSM handsets market, which accounts for around 80% of the total cellular telephony market in India, was about 65 million units. The rest is on CDMA technology, which is dominated by Korean and Chinese manufacturers like LG, Samsung, Haier and ZTE.
r_mithun@dnaindia.net
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