India’s third-generation airwaves are still on the auction table, but vendors of 3G-capable handsets are planning for the upcoming demand. New vendors like Intex Technologies, INQ Mobile and Karbonn are readying to take on market leaders like Nokia, Samsung, LG and HTC in the 3G battlefield.
The Indian telecom story was driven by low costs in both service plans and handsets. In the 3G arena too, the small vendors are pegging hopes on the price-sensitive Indian customer. “These new players do not have 3G handsets; however, they are in a planning mode. Their business model will depend on 3G tariffs,” said Anshul Gupta, principal analyst, Gartner.
According to IDC, new vendors had a combined market share of 12.3% out of 2009’s overall handset sale of 101.54 million units. “This represented a steady growth from only five new vendors representing a 0.9% combined share of units sold in January-March 2008 ,” said Naveen Mishra, lead analyst, mobile handsets research, IDC India.
London-based INQ Mobile feels that it’s the right time for India’s 3G entry. Frank Meehan, Global CEO, INQ Mobiles, said that India is a different market in terms of choice of handsets, competition and price sensitivity. “3G handsets in UK today constitute more than 50% of the total handsets sold, while the numbers in US are over 85%. In India, we expect the same numbers over a few years; hence, we will be heavily focusing on 3G. We are currently building our channels and strategy,” he added.
3G is expected to create new market segmentation. “The shift would be similar to what happened to PCs after laptops became popular. We have started our R&D on 3G handsets and will be coming out with such handsets by the end of the year,” said Sudhir Kumar, national sales manager, Intex. The company has also boosted R&D expenditure on its 3G initiatives.
“Currently, 3G handsets in India are expensive, since the market is very small. However, with rising competition and innovation, prices will come down. We will be launching 3G handsets costing Rs 6000-Rs 7000,” said Rajiv Khanna, chairman, Movil mobile.
3G will also boost the market for internet on mobile. “Surfing, emailing and downloading of applications will be the most sought-after feature. The growing demand in Indian market made us launch a 3G handset which costs Rs 10,000. Almost 80% of our handsets sold in India will be 3G-enabled,” said Ajay Sharma, country head, HTC India. Taiwan-based HTC makes handsets under its own brand, as well as makes phones for other manufacturers.
Challenges like inter-operability between operators, cross-functionality between applications, durability and robustness of handsets will be the key concerns for manufacturers. “3G is a marriage of handsets with the right applications. This, when accomplished in a seamless manner, would boost demand.
Price points of both play a key role in this marriage. If 3G is affordable to the masses, vendors won’t shy away. We will be ready with our 3G handsets before operators are ready with their 3G offerings,” said Shashin Devsare, executive director, Karbonn mobile.