India's cellular market to surge: Sony Ericsson

By SiliconIndia   |   Thursday, 25 September 2003, 07:00 Hrs
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NEW DELHI: India's cellular market is expected to double each year because of the country's low teledensity and rockbottom rates, a senior Sony Ericsson Mobile Communications official said on Thursday.

India, which rolled out cellular services about nine years ago, already has some 17.4 million cellular users and Sony Ericsson is one of at least a dozen handset players competing for a slice of the growing pie.

"The Indian cellular market is doubling each year," said Sony Ericsson's general manager (Indian operations) Sudhin Mathur.

"What we call a typical hockey curve growth, it has already started happening in India. And with penetration at such low levels, the only direction for growth is upwards."

The hotly competitive domestic cellular industry is billed as one of the fastest growing markets globally and many global phone makers have turned to India and China in recent years because of slowing demand in western markets.

Mathur said he expected the Indian market to have 100 million mobile users by 2008 because of the country's low penetration rate of less than two cellular phones for every 100 people compared with a high 19 in China and more than 60 in Europe.

Analysts say the numbers will surge because India has some of the world's lowest call rates of about Re 1 a minute and there is enormous potential in the still untapped rural areas, home to two-thirds of the billion-plus population.

"The mass market of first time users is where large growth is happening which is characterised by price-sensitive entry level consumers who want value-for-money phones," Mathur said.

Sony Ericsson, an equal joint venture between Japanese electronics giant Sony Corp and Swedish telecoms equipment maker Ericsson, began selling handsets in October, 2002.

The London-headquartered firm, the world's number five mobile handset maker, sells 10 mobile phones priced between Rs 5,000 and Rs 40,000 in India.

Other global players in the $1 billion Indian handset industry include Nokia, Motorola Inc, Siemens AG and Samsung Electronics Co Ltd.

No official sales figures are available for the sector, but analysts say Nokia, the world's number one phone maker, has a dominant share and Sony Ericsson is amongst the top four brands.

Mathur said Sony Ericsson expected its growth in sales in India to outstrip the sector's total growth rate.

"In the longer term, say five years, we expect our sales growth to exceed market growth."

He said Sony Ericsson expected the highest growth in sales to come from the Asia-Pacific sector, excluding China.

"In terms of growth potential, Asia-Pacific is the fastest growing segment for us. Markets like India, Thailand and the Philippines are showing higher growth potential in the region."

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