Chinese Firms Line Up To Enter Indian Handset Market

New Delhi | Updated: Feb 27 2004, 05:30am hrs
The fast growing mobile handset market in India is luring many Chinese companies. After Bird International of China, ZTE Corporation - a telecom equipment company promoted by the government of China - is now entering the Indian market.

ZTE Corporation has emerged the lowest bidder in a recent tender floated by the government-owned Mahanagar Telephone Nigam Limited (MTNL) to acquire 50,000 CDMA (Code Division Multiple Access) handsets. Sources close to the company said that ZTE might now enter the Indian handset market with full fledged operations as it would have to create infrastructure to supply and support MTNL handsets.

Another firm called Hisense - a consumer durable and electronics company of China - is also trying its luck to enter India through a bulk deal. Hisense was also one of the contenders for the MTNL tender and has emerged as third lowest bidder. One of the largest handset maker of China, Bird has already entered in India in August last year.

When contacted by eFE, ZTE Corporation spokesperson in Delhi office confirmed winning the MTNL tender for CDMA handsets but declined to comment on ZTEs future plans of handset business in India. Hisense could not be contacted for comments as the company, so far, does not have any direct operations in India.

Interestingly, the MTNL tender for CDMA handsets was floated and closed at an amazing speed. The tender was floated on 13th Februray and was closed on 25th February, according to MTNL sources close to the tender process.

The sources informed that MTNL was in a hurry as one of the recently floated tender - to acquire 1 lakh CDMA handsets - had run into trouble with one of the bidders XL Telecom (representing handset manufacturer Kyocera) moved court against the purchase order issued to ITI (respresenting Hyundai), as reported by eFE earlier.

MTNL has capacity for around 1.5 lakh CDMA lines in Delhi and Mumbai each out of which 0.5 lakh lines each in Delhi and Mumbai are operational, at present. Rest of the capacity is lying idle due to lack of availability of handsets.

In the latest MTNL handset tender, ZTE has emerged the lowest bidder by quoting a price of Rs 3,600 per handset. The company, interestingly, has also secured second lowest position at Rs 3,641. However, Hisense has emerged as third lowest after quoting a price of Rs 4,050 per handset.

As per tender conditions, the entire order will be given to the lowest bidder. MTNL officials, when contacted, confirmed the development but declined to go on record.