3G: Handset companies line up new launches, cut prices

Mobile phone manufacturers have seized the opportunity to sell 3G phones, even before private telecom operators are awarded the airwaves, by lining up new launches and cutting handset prices to just over Rs 4,000.

In doing so, cellphone makers are attempting to lure buyers of high-end GPRS handsets, which operate on the 2G spectrum. Phones operating on the 3G airwaves, which are up for auction, offer faster data downloads and high-quality video streaming.

“Even before 3G auctions are complete, we have seen significant demand for handsets,” says Jeff Taylor, co-founder, INQ Mobiles.

Nearly 20% of India’s 550 million cellphone subscribers possess high-end GPRS handsets, which are priced between Rs 2,500 and Rs 35,000.

Nokia is offering a 3G phone (model: 2730) from Rs 4,119 onwards, while Sony Ericsson’s phone begins at the Rs 6,000 price-point. At the higher end, Blackberry’s 3G model is priced upwards of Rs 17,000 while Apple’s iPhone 3G is priced at over Rs 30,000.

Mobile phone manufacturers are expecting the spectrum auctions to shake up the Rs 35,000-crore market, which operates on wafer-thin margins of 1-2%.

Value-added service players are also eyeing gains from the launch of TV serials or comedy clips on mobiles. Second-largest player Samsung has one of the largest cellphone line-ups with 13 models and plans to launch up to seven more in the next six months.

“India is a technology-adaptive market, and thus the new launches,” says Ranjeet Yadav, head of Samsung’s IT division.

Delhi, Bangalore and Mumbai are the largest markets for high-end phones. The Capital alone sees 20% of sales for phones costing over Rs 10,000 in India. “Pricing of handsets will not be a problem as most handsets are already quite affordable,” says Sudhin Mathur, head of LG’s India mobile division. LG has about five 3G handsets and plans to introduce up to 10.

Surfing, emailing and downloading of applications will be the most sought-after features on the new handsets, says Mr Taylor of INQ Mobile, which entered the Indian market just two months ago with Aircel.

The company has two handsets in the Indian market, both of which are 3G-enabled. It is planning to come out with altogether five handsets in the mid-market price segment of below Rs 8,000, he says.