2007 a hot year for low-cost handsets

By SiliconIndia   |   Wednesday, 27 December 2006, 06:00 Hrs
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NEW DELHI: The New Year holds good news for those looking to buy low-cost entry-level handsets. An Economic Times report stated today that the year is likely to see the introduction sub-Rs 2,000 color handsets, sub-Rs 1,000 monochrome handsets, a possible 3G rollout towards the end, and much more in value-added services. Taiwan, China and Korea have bagged deals to produce low-cost handsets for India. Also, in addition to this year’s commitment of $1.5 billion in telecom manufacturing, the department of telecom is expecting fresh investments worth $2 billion next year.

LG’s GSM division head HS Bhatia told ET, “I believe that the sub-Rs 2,000 color handset would be possible by mid-2007. Companies are already working on cracking that barrier.”

PSU telecom operator BSNL is all set to launch sub-Rs 1,000 monochrome handset in the market in the coming year. In this regard, the company is in talks with Taiwanese and Chinese handset manufacturers. The company has in fact begun preliminary talks with Taiwan’s Compal and China’s TCL Communication Technology (TCT). These companies have developed a single chip platform for handset companies to launch the sub-Rs 1,000 handset. The chip has also been tested with Nokia and Motorola’s products.

Pankaj Mohindroo, chairman, Indian Cellular Association, told the publication, “The sub-Rs 1,000 monochrome handset is possible next year but I see Rs 1,200 emerge as the price point most handset companies would have products available at.”

While Nokia’s entry-level handsets start at a price point of Rs 2,000, Motorola launched its Motofone, priced at Rs 1,600 last month to establish supremacy in the Rs 14,400-crore entry-level handset market in India. The fierce competition in the segment has compelled LG and the likes to ink contract manufacturing deals with Chinese and Taiwanese OEMs like Arima for making cheaper handsets. Reliance has also inked a deal with Korean manufacturers Rose Telecom and Kedcom for supplying handsets priced at $30.
“While investments worth $1.5 billion were committed this year in telecom manufacturing, we expect a further commitment of $2 billion worth of investments in 2007,” a department of telecom (DoT) official was quoted by the paper.

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