LG plans to be No 2 GSM handset firm by year-end

LG Electronics, the Rs 4,500 crore consumer durable company, is planning to be the second leading player in the global system for mobile phones (GSM) handset market in India by the end of this year.

The company has launched two models, G7100 and G3100, and plans to sell nearly five lakh GSM handsets in India this year.

Praveen Valecha, product group head, mobile phones, LG Electronics, said, "Both the new models are unique in terms of pricing and features. LG will launch more models, which will cater to all segments of the market. In order to achieve our target of five lakh handsets this year, we will be focusing on a retail partnership approach with a retail network of over 400 partners across the country."

The company entered the GSM handset market in November 2003 and sold 18,000 handsets by the end of December 2003.

The company will also focus on the direct dealer channel, cutting across different layers like national and regional distributors.

The network will be expanded to around 800 channel partners in the first quarter of 2004.

Plans are on to set up over 250 service centres across 141 cities.

Officials at LG have also said that they will have a product portfolio of 15 models by the end of 2004 and this division alone will account for 10 per cent of LG's revenues in India.

While the gross GSM handset additions in 2003 is expected to be around 10 million, nearly 35 per cent of this additions came from the grey market.

This year LG officials estimate gross additions to be around 14-15 million with nearly 12 million additions to come from the organised sector.

They attribute this to a growing replacement market and duty cuts.