Chinese mobile maker dials Reliance ADAG

Yulong, China’s largest dual mode handset-maker and a subsidiary of Hong Kong-listed China Wireless Technologies, is in an advanced stage of talks with the Reliance Anil Dhirubhai Ambani Group (R-ADAG) for a distribution tie-up. An agreement would be signed by the first week of next month.

If successful, this will result in the Chinese major’s foray into the Indian market, one of the fastest growing in the world. R-ADAG is planning to sign the agreement through its retail venture, Reliance World, according to informed sources.

R-ADAG is expecting revenues of Rs 500-600 crore from this over the next five years, they added.

When asked, Reliance Webstore Director and Chief Executive Officer Sarup Chowdhary confirmed the development and said the company had begun test marketing of Yulong’s dual-mode phones in India. He, however, declined to comment on the revenues expected from the deal.

“Yulong sees a strategic fit with Reliance ADA Group on account of the Group’s presence in GSM and CDMA services through Reliance Communications. For Yulong, this agreement will allow it access over 104 top cities in India where Reliance World has its retail presence,” Chowdhary added.

Reliance World will be the exclusive distributor for Yulong’s handsets, including CoolPAD dual-mode (with two SIM cards) mobile phones. Initially, the company is planning to roll out five models of CoolPAD dual-mode handsets in India.

Sami al-Lawati, Yulong’s spokesperson for India, said: “We have approached Reliance ADA Group to retail and distribute our CoolPAD dual handsets in the Indian market."

Yulong’s India foray is part of its global strategy to penetrate overseas markets and take a leadership position in the global dual-mode markets.

At present, revenues from dual-mode smart phones account for over 55 per cent of China Wireless’ revenues, while CDMA-GSM dual-mode phones contribute nearly 40 per cent.

Nearly 4 per cent of the mobile phones sold in India are smart phones, and the Indian smart phone market is expected to cross 20 million handsets by 2010, with nearly 50 per cent of the volumes being contributed by business users.