Domestic handset makers go rural to drive sales

Domestic mobile handset makers are focusing on rural markets to boost sales as they take on competition from multinational giants like Nokia and Samsung.

Industry experts say about 10 million handsets are sold in the country every month. Of this, about 8.5 million units are multinational brands, which shows the popularity of these names.

"Indian mobile handset market is flooded today. In such a scenario, maintaining the trust of consumers has become a key challenge," Indian Cellular Association President Pankaj Mohindroo told PTI.

It is important for domestic brands to offer special features at cheaper costs to the consumers, he added.

MVL, a recent entrant into the market, shares the view.

"Our target is the smaller cities and rural towns as these regions present a huge opportunity. Even today, more than 500 million people don't have a mobile phone," MVL Telecom Director Arjun Rishi said.

According to a Voice&Data survey, 108 million handsets were sold in the country during 2009-10, making the mobile handset a Rs 27,000 crore market.

Homegrown handset makers like Spice, Micromax and Karbonn captured 14 per cent of the mobile phone market in India in FY 2009-10 compared to just 3-4 per cent market share in the previous fiscal.

While Micromax had a 4.1 per cent market share by revenue, Spice and Karbonn had a share of 3.9 per cent and 3 per cent in FY 2009-10, respectively.

Industry experts feel that selling feature-rich phones at low costs is also a challenge that domestic phone makers face.

"There are still areas in the country where electricity supply is not constant. To tackle this problem, we have launched a dual-SIM phone with a 72-day battery backup priced at Rs 3,400," Zen Mobile Managing Director Deepesh Gupta said.

Many Indian brands are selling dual-SIM feature-rich phones for as low as Rs 4,000, while the cost is higher for MNCs.

However, on the flip side, the low-cost handsets may fall short on applications, user interface and experience, and, often, quality of construction, solidity and robustness.

"The problem with Indian brands is that they lag behind in terms of after-sales service," an industry analyst said.

So, Indian handset makers have to focus on providing a feature-rich handset at an affordable price as well as a good after-sales service, he added.