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Foreign mobile handsets flock India

Soumik Sen | October 25, 2003

It's a situation that suits Amit Agarwal of Agrani Infotech perfectly. The franchise manager at Agrani is suddenly witnessing a flurry of new brands jostling for shelf space in the increasingly competitive cellular phone market.

October is traditionally the month for big announcements targeting the spending festive shopper. This year there has also been a flurry of companies announcing their foray in the cellular space.

Korean white good major LG is one of India's leading consumer durables companies and also the fifth largest mobile maker in the world. It made its debut in the Indian market by launching CDMA-enabled services when operators like Reliance started offering WLL.

But this month, LG forayed into the GSM segment with the launch of two handset models -- G5300 and G7030.

The imported handsets are priced at Rs 13,490 and Rs 18,990 respectively and come with 65K colour display and have a host of features like LMS (SMS with 3,200 characters), MMS, GPRS.

The more advanced G7030 has a unique dual-colour LCD and scrolling external screen that can be personalised.

Obviously, LG is not initially targeting the entry-level segment for the time being. But K R Kim, managing director, LG Electronics India says that by 2004, LG will be present at every price point and will be introducing new models.

"We plan to bring a range of mobile gizmos to the Indian consumer and hope to sell around 400,000 handsets in the next calendar year," he adds.

With its range of white goods selling well in the metros and small towns, it isn't very surprising that LG Electronics will be using the direct dealer channel, cutting across layers like national and regional distributors to push its handsets.

Initially, there will be about 500 dealers and the strength will be gradually expanded to 2,000 dealers by the first quarter of 2004.

Says Praveen Valecha, product group head, mobile phones: "This is the first time in the history of the Indian cellular industry that any player will be using the direct dealer channel."

And realising the need for service LG intends to reach out to its customers by setting up over 250 service centres across India to be present in the interiors of the country.

The need to reach out to the customer is paramount to succeed in highly competitive markets like India.

Taiwanese white goods manufacturer BenQ also has its road map well etched out for the future.

BenQ is the largest mobile phone manufacturer in Taiwan and the sixth largest worldwide and it has entered the Indian mobile phone market with two handsets -- a two-colour bar model M550G and a colour-screen clam shell model S830C.

In its first phase the two models will be launched in New Delhi, Mumbai and Bangalore, and should be available throughout the country by year end.

The M550G, priced at Rs 5,450 is a GPRS-enabled instrument that allows users to do picture messaging, compose their own tunes and store upto 500 phone book entries.

The more advanced high colour resolution, big screen S830C priced at Rs 12,450 supports Java applications and has features like a picture phone book and the Rs 14,700 model includes the detachable digital camera.

"We are offering features at price levels that have not been offered in the past, " says country head, BenQ, Ashish Bakshi.

"We believe in giving 'more' to the consumer at competitive price points and are looking at a 5 per cent market share by the end of this year," he adds.

BenQ has been in this country for the last two years. It has been selling digital lifestyle products like digital cameras, LCD monitors and scanners through its distribution chains but this year will be pushing staff strength to 40 to sell its cellphones.

After these two models, BenQ will be launching six more models in the GSM segment by December 2003 ranging between Rs 5,000 and Rs 15,000 and also handsets in the CDMA segment by March 2004, when they'll take on LG head on.

In the coming years BenQ plans to bring in PDA smart phones and Joybook brand laptops. But for the time being the aim is to capture 5 per cent of the 16 million handset market (half of which are GSM phones), which is double LG's target.

Not too difficult, it may seem, going by BenQ's overseas track record. The company is the third largest player in Taiwan (after Nokia and Samsung), where the cellular phone penetration is more than 100 per cent.

"It's around 2 per cent in India, and so there's enough room for players to carve their own small niche, " adds Bakshi.

The flurry of activity has been made possible, because of the cut throat competition between the CDMA and GSM lobbies vying for the consumer pie, he feels.

Consequently, after successful launches in Taiwan, China, Malaysia and Thailand, India is the fifth market where BenQ is launching its range of mobile phones.

The $3 billion-dollar group will be spending heavily in India. In the first year alone, it has earmarked a budget of Rs 10 crore to build the BenQ brand in the consumer mindspace.

For its distribution, BenQ has appointed First Mobile India for the south and west regions and eSys for the north and east.

While a 100-city presence is being targeted by next year for distribution and service, BenQ also hopes to set up its inaugural flagship store, displaying its range of lifestyle products, like the one it has in Singapore.

Amit Agarwal at Agrani is tightlipped about the future. Agrani is the distributor for Chinese cellphone manufacturer Bird which also has big ambitions in India.

But Agarwal also says that three more international brands are likely to be in the shops by the next quarter. And the cellular marketplace is bound to get noisier all the time.


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