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| Revenues seen stagnating in '09 |
| Surajeet Das Gupta & Ishita Russell / New Delhi Mar 07, 2009, 00:40 IST |
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Mobile subscriptions in India may be growing by 10-12 million a month, but handset makers do not expect growth in 2009 to match 2008’s heady 25 per cent.
This is because the replacement market, which accounts for around a third of the total market, is falling, with customers postponing decisions to upgrade and new subscribers buying cheaper or second-hand sets.
Estimates by the Cellular Operators’ Association of India show that companies sold around 110 million phones, worth Rs 26,000 crore, in 2008. In 2009, however, volumes are expected to rise around 9 per cent, to 120 million phones. Most new sales will come from entry-level phones and so the value of sales will stagnate.
“The replacement market is under pressure,” said VP Dutt, country head, Samsung Mobile. “Consumers who used to change phones every18 months on an average are postponing their decision due to the slowdown.”
As a result, he said, companies expected the share of the replacement market to fall to a fifth of total sales. “Since most replacement sales are for upgraded models, the fall in this market will have little impact on the value of mobile sales in 2009,” he added.
Handsets below Rs 3,000 accounted for 63 per cent of the market, Dutt said, and this share would increase, since most new subscribers come from the emerging market of rural India.
Anshul Gupta, principal analyst for Gartner, attributes the falling replacement market to “weak consumer confidence”.
As a result of the shift in the nature of the market, “revenues per unit may fall”, said Anil Arora, business group marketing head, mobile communication, LG.
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