Handset makers to ride on low-cost 3G phone wave

If prices of 3G services are something of a cause of worry for consumers, here's a reason for them to heave a sigh of relief. 

Mobile consumers can now expect a sharp decline in the prices of mobile handsets as manufacturers slash prices to get their hands on the expanding 3G user pie.

For instance, with its 3G phones likely to be launched next month, Wynn Telecom Pvt. Ltd. is looking at the sub Rs 3,000 handsets for the entry level segment.

"We are planning to launch low cost 3G phones since we are eyeing the entry and mid level segments.

"Handsets offering video calling, mobile TV and high speed data download will have to be priced around Rs 3,000 or so," says Arvind Vohra, co-founder and managing director, Wynn Telecom Pvt. Ltd, which manufactures and markets mobile handsets under the brand name 'Wynncom Mobile'.

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Apparently, mobile handset manufacturers are using the opportunity in 3G rollout to capture the new 'Mobile Only' Internet generation from where a large portion of next billion web users is expected to come.

"Low-cost 3G handsets will play a critical role especially in converting the existing consumers in the tier I and II cities.

"As per our estimates, only 30 per cent of the new consumers will use 3G services once it witnesses a Pan India roll-out.

"The Indian handset market is estimated to touch 165 million by the end of the current financial year 2011.

"3G handsets will be more than 10 per cent of this base. While 60 per cent of the 3G users will be having handsets priced sub Rs 5,000.

In the longer run, total of 8-10 per cent of the total consumers are likely to shift to 3G services.

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Keeping this in mind Intex plans to launch 3G handsets starting from entry level (in the range of Rs 3,000) upto a mid -level (Rs 4,500-5,000) and touching Rs 6,000 onwards range," says Shailendra Jha, DGM -Telecom, Intex Technologies (I) Ltd.

According to industry players, prices of 3G handsets depend a lot on the diversity of the value added services content offered to the consumer in the handset.

A handset must give the consumer a glitch-free user experience of all the services provided by his service provider.

While the market as of now seems to be operating on the 'higher the price, wider and better the proposition' there are some who have grabbed the opportunity and coming up with cost efficient models.

What's more, the move is expected to be spearheaded by Indian mobile handset manufacturers.

"Even our handset partners like Samsung have been offering 3G enabled handsets at sub Rs 3,500.

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"The prices of handsets will have to be competitive and I believe this will be headed by Indian manufacturers," says Nipun Sharma, chief operating officer, Gujarat, Tata DOCOMO.

On its part Nokia provides a wide range of over 25 different 3G handsets to consumers, starting with Nokia 2730 Classic priced at Rs 4,689, while the most expensive 3G currently offered by Nokia is the N900 at Rs 28,449.

The company has also announced the Nokia C2-01, which is an extension of Nokia's affordable 3G phones.

The Nokia C2-01 will be available in the first half of 2011 and is aimed at small business owners and users wanting the 3G speed of social experience but not yet ready to move on to Touch or QWERTY.

"In line with our strategy to bring newer experiences to consumers and to ensure that access to mobility and related experiences are not limited to a certain segment of consumers, we have been democratising smartphones and breaking price barriers to make traditional smartphones more affordable to all.

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"We have launched and will continue to launch a range of mid and high end Smartphones, which include a mix of QWERTY and touch interfaces across segments and operating platforms," says V Ramnath, director operator channel, Nokia India.

Similarly Techcom which recently forayed into mobile phone manufacturing would have its 3G enabled handsets priced at Rs 3,000 and above.

According to Sandeep Kumar Kedia, director of Techcom, "We are already witnessing a correction in prices with most handset manufacturers bringing down their prices. Compatibility of 3G applications with the handset, the processor speed and the Operating System would be important determinants that would decide the success of a handset manufacturer and Techcom will focus in all these areas so as to deliver top quality 3G handsets to its customers."

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Internet usage is another strong determinant of how the 3G technology and VAS will drive usage of the emerging Mobile Only' Internet generation.

For instance, in a recent survey conducted by mobile Internet browsing software provider Opera Software, 49 per cent of people who are using the mobile Internet either never, or infrequently, use the desktop Internet. 

"The popular belief is that usage of mobile web will increase due to the growing smartphone and 3G penetration. However, we feel that the biggest driver in India is 'feature phones', these are not smart phones but basic handsets that allow users to connect to the Web.

"Our product Opera Mini is used by 60 per cent of total users who access internet from their mobile devices in India and most of these millions of users use basic/ feature phones," observes Sunil Kamath, director -- sales, Opera Software.