Hi,
You can find all answers to your question on the www.voicendata.com,
India's leading telecom publication. Search for The site is paid but
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answer. Hope that answers your query.
The data has got jumbled a bit. But you can get the entire story on
the link http://www.voicendata.com/content/vNd100/2004/104061533.asp
and many more stories on handset market in India from the above
mentioned website.
Thanks,
Sudesh
V&D 100 - 2004
MOBILE PHONE: A Ring-away Success
With a growth of about 568 percent, the mobile handset industry has
broken all records
Pravin Prashant
Tuesday, June 15, 2004
Fiscal 2003-04 belonged to the mobile handset industry, an industry
which showed an outstanding growth. The Indian mobile handset industry
has broken all records and achieved a growth of 568 percent in value
terms. The industry has recorded a turnover of Rs 8,344 crore ($1.85
billion). Just a comparison, the handset industry in FY 2002-03 was
around Rs 1,250 crore, of which GSM contributed around Rs 727 crore
whereas CDMA contributed around Rs 523 crore. In FY 2003-04, CDMA
contributed around Rs 4,153 crore whereas GSM contributed around Rs
4,191 crore.
In value terms, GSM leads the way, but in volumes CDMA has a slight
advantage. The CDMA handset market in FY 2003-04 was estimated at
around Rs 4,153 crore, registering a growth of around 694 percent on
the other hand GSM handset market in FY 2003-04 is estimated at around
Rs 4,191 crore, registering a growth of 476 percent. The GSM market
leads CDMA by a narrow margin of around Rs 38 crore.
In volume terms, CDMA leads the way. In FY 2003-04, the Indian market
has added around 16.46 million handsets registering a growth of 563
percent. In the last fiscal GSM contributed around 8.21 million units.
CDMA had a slight edge over GSM and is pegged at around 8.25 million.
Here GSM leads by 0.61 million. In FY 2002-03 the Indian market had
added 2.48 million handsets and this year it is 6.89 times that
number.
The Vendors
The main catalyst for this growth was the drastic cut in prices by
service providers both on the total acquisition cost as well as on
services front. With duty reduced to four percent, the cost of
handsets has gone down significantly in calendar year 2004, thereby
driving volumes in the last quarter. Almost all major vendors are
present in GSM. Moreover, in the last fiscal, Chinese and Taiwanese
players have also entered the Indian market and so the market has
become very competitive. On the GSM side around 20 companies are
present in India whereas on CDMA it is around 10 companies. All this
has resulted in more choice for consumer both in terms of brands as
well as model.
On the CDMA side, all the major players have launched their handset in
the Indian market. In the last fiscal there were two new
entrants-Nokia and Motorola-and they are giving some fight to
established players like LG and Samsung. On the GSM side, LG has
lunched its model in the last fiscal and is doing pretty well. LG is a
company to watch out for in also in the GSM space. Seeing stupendous
growth, companies like Bird, BenQ, DBTel, and Kejian have launched
their products in the Indian market in the GSM space.
Top Mobile Handset Vendors (FY 2003?04)
Rank Company Sales (in Rs Cr) % Market Share
1 LG Electronics* 2,797 34
2 Nokia India** 2,481 30
3 Samsung Electronics# 1,074 13
4 Motorola India 633 8
5 Hyundai Curitel 297 4
6 Siemens 243 3
7 Sony Ericsson 210 3
8 Kyocera 60 1
9 Others## 549 7
Total 8,344 100
*includes LG India revenues of Rs 40 crore
**includes Nokia Corporation revenues of Rs 180 crore
#includes Samsung India revenues of Rs 442 crore
##includes Benq, Bird, DBTel, Kejian, Philips, Primus, Sagem, Telson,
GTran, and others
V&D estimates CyberMedia Research
LG Electronics has overtaken Nokia India and occupies the number one
position in the overall mobile handset space. The company has a market
share of around 33.5 percent and is above Nokia by four percentage
points. In terms of sales, LG is pegged at around Rs 2,797 crores.
Nokia's revenues are estimated at Rs 2,481 crore and it has a market
share of around 29.7 percent. Samsung occupies the third position in
the overall space handset, though it is second in both GSM and CDMA
space. The company has a market share around 13 percent. It has GSM
revenues of Rs 442 crore and CDMA revenues of Rs 632 crore. Motorola
is placed at fourth with a market share of around 8 percent. Hyundai
Curitel has done well so is Siemens and Sony Ericsson, active in the
high-end space.
In the overall handset market, other players contribute around 6.6
percent, i.e., around Rs 549 crore. It is high on the GSM side and
contributes around 13 percent. The reason for this is the long list of
vendors in others category which includes Alcatel, BenQ, Bird, DBTel,
Kejian, LG, Panasonic, Philips, Primus, Sagem whereas on the CDMA
front there are players like Telson, GTRAN, and others.
GSM Subscriber & Handset Scenario in India
Year New Subscribers
Added Legal Handset Grey + Recycled Handset Total Handset Total Subscriber Base
FY2002-03 6,256,823 1,440,000 4,820,000 6,260,000 12,690,000
FY2003-04 13,464,405 8,219,088 3,178,436 12,040,524 6,154,405
Total Market Size = legal market plus grey and recycled
A) Total GSM addition in FY 2003-04 is around 13,464,405
B) Churn + Duplicate SIM is around 20 percent of 13,464,405 = 2,692,881
C) Replacement is around 10 percent of FY 2002-03 base: 6,260,000 = 626,000
D) Grey, refurbished and old handset was around 25 percent of total
addition in FY 2003-04 = 3,178,436
Total Legal market in FY 2003-04 = (A-B+C-D) = 8,219,088
V&D estimates CyberMedia Research
LG, the market leader in India has done pretty well because of its
early mover advantage in the CDMA space. The wide range that LG has is
in no comparison to that of its competitors. The company wants to
repeat its performance even in the GSM space and is moving at a fast
pace and is focusing on mid- and high-end segment.
Overall, Nokia is ranked at number two in the handsets space as it has
not been able to encash on its CDMA portfolio. Strong in the GSM space
where the company has around 55 percent market share, the company is
ranked no. 5 in CDMA and has a market share of only 4 percent. The
company has increased its portfolio in the CDMA space by launching
2112, an entry-level phone and 3125 mid-range phone.
Top GSM Handset Vendors In India
Rank Company Sales (in Rs Cr) %Market Share
1 Nokia 2,301 55
2 Samsung 442 11
3 Motorola 435 10
4 Siemens 243 6
5 Sony Ericsson 210 5
Others* 560 13
Total 4,191 100
*Alcatel, BenQ, Bird, DBTel, Kejian, LG, Panasonic, Philips, Primus,
Sagem, and others
V&D estimates CyberMedia Research
Samsung has done well both on the CDMA as well as GSM space. Very
strong in the strong in the mid- and high-end , the company has netted
revenues of Rs 1,074 crore. The company has also done well on
clamshell, a hot model range in the Indian market. Motorola occupies
the number four slot, and has a wide range of products in the GSM
space. It has a limited range in the CDMA space. Hyundai Curitel has
done well on the government sector and is strong on the CDMA front.
Siemens has wide range of phones in the GSM category whereas Sony
Ericsson has done very well in the high-end category after
restructuring.
In others category, there is a long list and a majority of the
companies have joined in the last fiscal. Chinese vendor, Bird has
entered the Indian market through Agrani in the month of August and
has launched products for all the segment. BenQ of Taiwan has entered
the Indian market in the month of October and is focusing at the high
end. DBTel has entered through Munoth Communications and has launched
over ten models. Alcatel reentered the Indian market and tied with
Videocon as a country distributor focusing on entry- and middle-level.
Now having formed a JV with TCL, the company will reorient its India
strategy. In the last fiscal, Siemens tied up with Tech Pacific and
launched a whole range of models and thereby occupying fourth position
in the GSM space.
Being a new entrant, LG has opted for a direct model instead of a
distribution model and this is paying off. The company is focusing on
color and camera phones and is doing pretty well as it is encashing on
LG brand name. Pansonic is focusing on the mid and high range.
On the CDMA front, Kyocera has launched PDAs as well as entry models
whereas GTRAN is focusing on only high- and medium-range products.
Telson has launched in the meanwhile, a single brand-watch-cum-CDMA
phone.
The Business Model
For two competing technologies, the handset vendor has opted for
different strategies. A majority of handsets sold in the GSM space is
through the retail channel whereas in the absence of SIM card in CDMA
space almost all the handsets are sold through service providers.
CDMA Subscribers in India (as of 31st March 2004)
Year Wireline FWT WLL(M) Total
FY2002-03 40,747,237 826,706* 1,171,020 42,744,963
FY2003-04 40,489,725 2,737,857# 7,157,156 50,384,738
*includes CDMA mobile of BSNL and MTNL. The combined figure is 605,974
#includes CDMA mobile of BSNL and MTNL. The combined figure is 1,531,000
V&D estimates CyberMedia Research
Almost all the GSM vendors have opted for a retail channel except LG,
which has opted for a direct-distribution model.
On the CDMA front, the service provider acts as the master distributor
and handset vendor pass that margin to the consumer. With CDMA service
providers providing a package deal, even GSM service providers have
started a package deal, something they had discontinued sometime back.
CDMA service providers ask for specific requirements from the vendor
and once they agree, they develop all these models. These typically
take around 8-10 months. With the market moving at a very fast pace,
it is becoming extremely difficult for vendors to cope up with the
changing requirements of the service provider.
The Trends
A majority of CDMA phones are data-enabled which is not the case with
GSM. The market for MMS-enabled phones are small and is picking up.
The mobile phone model of the year goes to RD 2030 of LG Electronics.
Also according to VOICE&DATA estimates, LG has sold more than 2.5
million handsets. The best marketing scheme for the last fiscal was
Reliance Monsoon Hungama scheme. This Rs 501 scheme helped in lifting
the fortunes of CDMA market and contributed around two million
subscribers for Reliance Infocomm.
Top CDMA Handset Vendors In India
Company Handsets Sold Sales (in Rs Cr) FWT/FWP Sales (in Rs Cr) Total (in Rs Cr)
(A) (B) (A+B)
LG 4,500,000 2,259 700,000 498 2,757
Samsung 1,250,000 632 Nil Nil 632
Hyundai 519,000 260 55,000 37 297
Motorola 550,000 198 Nil Nil 198
Nokia 500,000 180 Nil Nil 180
Kyocera 131,000 60 Nil Nil 60
Others* 5,000 5 40,000 24 29
Total 7,455,000 3,594 795,000 559 4,153
*Telson, GTRAN, and others FWT=Fixed wireless terminal FWP=Fixed wireless phone
V&D estimates CyberMedia Research
With market picking up in color and camera phones, in this fiscal
there will be a lot of new models in this space. India will witness a
lot of activity in this space.
The booming handset market in India has led to manufacturing
opportunities for top players and one might see some manufacturing
operations in the country by FY 2004?05. Some vendors are either in
the advance stage of decision taking or doing feasibility study And
with new minister's focus on manufacturing, India will soon join the
league of other mobile handset manufacturing country in the world.
With markets increasing at a fast pace, it is all the more important
for companies to be closer to the Indian market so that logistics
problems can be minimized. Companies are sprucing up their service
centers both in terms of numbers as well as reach.
Top CDMA Handset Vendors In India
Rank Company Sales (in Rs Cr) %Market Share
1 LG 2,757 66
2 Samsung 632 15.2
3 Hyundai 297 7
4 Motorola 198 4.8
5 Nokia 180 4
6 Kyocera 60 1.4
Others* 29 0.7
Total 4,153 100
*Telson, GTRAN, and others
V&D estimates CyberMedia Research
Apart from manufacturing opportunities, the handset industry will also
see lot of after sales support required for which companies have to
get ready at the earliest. Recently, a senior LG employee, WC Kim has
opted to provide after sales support to LG through his new venture,
'Ways In Telecom', which focuses on repair of LG CDMA handsets.
The Outlook
With Tata joining the league of Bharti, Reliance, and BSNL, the market
is expected to achieve a growth of around 20?25 percent in volume
terms. With Bharti and Tata expanding in new geographies and service
providers expanding their coverage in smaller cities, the sector is
expected to show an excellent growth. All this will result in a bigger
market and increased number of vendors in the mobile handset space.
The author of the report is Pravin Prashant, Senior Journalist with
Voice&Data magazine. |
