In the high-profile war being waged visibly between cellular phone service providers and limited mobility service providers, the potential of basic telephony has been largely ignored.

Currently, India has a teledensity of 4 per cent or four telephones for every 100 individuals. The Department of Telecom has set a target of 7 per cent teledensity by 2005 and 15 per cent by 2010.

The growth target means that the market for landline handsets is rapidly growing. Sailing on that wave is Bharti Teletech, which is launching a slew of new phone models to counter the consumer demand and competition from cheap imports.

On Wednesday, Bharti launched Walk-Clip, a cordless telephone with caller ID feature, priced at Rs 2,995 and Millennium Clip-Max, a corded telephone which has the caller ID feature and a two-way speaker, priced at Rs 1,295.

"World over, including China, we see that fixed line and cellular phones grow together. The low penetration of telephones means that there is a tremendous market out there and we think that we will see a requirement of 10 million phones every year for the next few years," says Rakesh Bharti Mittal, vice chairman and managing director, Bharti Enterprises.

The total landline phone market in India is estimated at 4.1 million phones. Of this 20 per cent or 840,000 phones are cordless and this segment is fast growing.

"People are increasingly buying cordless phones to provide them mobility around their house and office compounds," says Deepak Bhatia, deputy general manager, business development & sourcing, Bharti Teletech Limited.

However, the demand for cordless phone is largely serviced by the grey market, which is estimated to have nearly 70 per cent of the market share of the cordless phone segment.

Brands like Sony and Panasonic remain the highest selling in this segment.

But Bharti Teletech has seen its share expand from 1 per cent in 2000 to 6 per cent by 2003. The boost came from the launch of the Beetel Walkphone, a cordless telephone with a jelly bean shape that came under the sub-Rs 2,000 price bracket.

Its latest cordless model with caller ID feature is claimed to be priced 40 per cent lower than similar models available in the market. Bharti expects to sell 10,000 units of its latest caller ID model every month.

"Controlling the grey market is in the hands of the government. With the reduction in import duties, we have seen that happening slowly. We think that with the choice of a branded competitively priced phone that has one-year warranty and no-questions asked replacement policy that we are offering customers will opt for Beetel even in the cordless segment," says Mittal.

Also, in the pipeline are innovations like the SMS phone and the email-enabled phones.

The SMS phone which is expected to be launched in the April-June quarter will permit exchange of short text messages from one fixed line phone to another fixed line, both models being compatible with the feature.

Similarly the e-mail enabled phones will let users send text emails directly through their fixed line phones, eliminating the need for a computer.

"These will be telephones with a large display, keyboard and are being still developed. We will be ready to launch these phones almost simultaneously when the worldwide launch happens," says Mittal.

The e-mail phones are expected to hit the market in about six months.

Established in 1985, Bharti Teletech has 3 manufacturing plants and an annual installed capacity of 5 million phones. According to the company, one out of 3 phones in India is a Beetel, the brand under which Bharti retails its phones.

"We started our first production with Siemens and that model lasted for nearly 10 years. Now we have a new model coming out every 18 months," says Mittal.

Bharti Teletech has 22 models in the market today with a range of features that includes both the corded and cordless segment. It's phones range from Rs 395 for a basic corded model to Rs 3,095 for a high end, feature rich cordless phone.

"The customer's expectations from the phone has changed. Earlier it was the basic black or grey push button phones that customers used. Now they want feature rich phones and stylish designs at good costs and service," says Mittal.

Bharti Teletech is the first indigenous manufacturer of caller ID phones. The Beetel brand has nearly 30 per cent of the market share of fixed line telephones in India.

Its biggest customers are the Government-owned service providers, Bharat Sanchar Nigam Limited and Mahanagar Telephones Nigam Limited. A large chunk of Bharti Teletech's sales comes from supplying to these providers by winning the contracts through tenders floated.

Mittal says that Bharti Teletech also manufacturers phones for rivals like Tata and HFCL for whom it acts as an Original Equipment Manufacturer.

For Mittal and his team though the focus now is on exports. Already Bharti exports to 25 countries including the United States, the United Kingdom, Europe, the South Asian countries and the Middle East. Last year exports constituted 5.5 per cent of its total turnover of Rs 160 crore (Rs 1.60 billion).

This year it is expected to double to 10 per cent of the projected turnover of Rs 200 crore (Rs 2 billion).

"We want to export half a million phones this year. And we want to keep the 50 per cent growth rate for our exports even next year," says Mittal.