Cellphone rates yet to dip

MINI-BUDGET 2004

A day after the government announced customs and excise duty sops, leading mobile handset vendors are still not decided when to effect changes. Depending on the type, prices are expected to decline by Rs 400 to Rs 800 per handset.

Though, in principle, the handset makers say prices of mobile handsets will be reduced, they are yet to come out with the new rate card.

Senior executives with leading handset manufacturers say the companies are taking stock of their inventories because they are saddled with imported handsets, "imported at a higher Customs duty of 10 per cent".

Sanjay Roy, managing director of FirstMobile India said, "It will take some time for handset makers to realign to the new environment. It will take a while for manufacturers to come with new rates".

"We are waiting for the government notification. The handsets are imported ones and we will have to take a look at various sops before announcing new rates," said Nokia India executives.

The government, on Thursday, reduced the customs duty on the mobile handsets to 5 per cent from 10 per cent. This is expected to reduce prices by 5-6 per cent depending upon the type of handset.

"We will definitely pass on the benefits to our customers. But for now we are working on prices, to be announced within a couple of days," a senior LG Electronics India Pvt Ltd executive told Business Standard.

Motorola executives also claimed that it would take at least a week for the handset producers to compute new rates.

With the government lowering Customs duty, sales of handsets have come to a trickle. "This is a regular phenomena because the customer expect to buy handsets at a cheaper price. With high inventory of handsets, it will take at least a few days or a couple of weeks before new rates become applicable," said a handset manufacturer.