1 Managing Marketing Programs Pricing Strategies- Mobile Phone Industry By Parvez Rangwalla Email-ID:[email protected] com Welingkar Institute of Management Development & Research, Bangalore. 2 Topics Covered:Topic Page No 1. History and growth of mobile phone industry in India 3 2. Current scenario of Mobile phone industry 4 3. Marketing strategies of Major players- Nokia and Samsung 7 4. Pricing Strategies in Mobile Phone Industry 12 5. Current trend in mobile industry 17 6. Future of mobile industry (RURAL) 20 7. References 22 3 1.
History and growth of mobile phone industry in India: The real transformation came in the scenario of Indian telecom industry after announcement of National telecom policy in 1994. The mobile services were commercially launched in India in August 1995. In the initial 5???6 years the average monthly subscribers additions were around 0. 05 to 0. 1 million only and the total mobile subscribers base in December 2002 stood at 10. 5 millions. However, after the number of proactive initiatives taken by regulator and licensor, the monthly mobile subscriber additions increased to around 2 million per month in the year 2003-04 and 2004-05.
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In the last few years there has been a huge exponential growth with addition of about 10 to 15 million subscribers per month to customer base. In the initial days of mobile phone in India in mid 1990? s the grey market accounted for 80 per cent of the mobile phone sales due to a huge price differential between the legally imported and the grey market phones. Even as the government slashed the duties at the same time various mobile manufacturers reduced their rates to induce the customers to buy a phone from authorized phone shop. Today the grey market comprises very small share of market.
When mobile phones were introduced in India in the mid-90s, US based Motorola, Sweden’s Ericsson and Finland’s Nokia dominated the handset market in India. Over the years, the old order has changed today players like Samsung, LG, Apple, Virgin, HTC, Huawei, Haier are all competing for a place in the market. Apart from this there is also a competition from imported unbranded Chinese mobiles which are avaible with lot many features of a typically high end say Nokia mobile but, at a substantially lesser price. After the initial dominance of Nokia from 1990? till 2002, a change occurred in Indian market hen CDMA technology was launched in the year 2003. At this point the Korean brands namely Samsung and LG established themselves after they tied up with CDMA operator Reliance Infocomm. This was a breakthrough in India? s mobile phone industry since, people were able to get mobile phones with Reliance connection only for a initial cost of about Rs. 500/-. This opened up a mass market for mobile manufacturers in India. Gradually all the major players like Nokia, Motorola came up with their CDMA models and have been able to regain their market share. In the last few years India has witnessed a revolution in mobile phone market with about 8 to 10 million subscribers being added to the customer base each month. The major reasons for this boom have been: 1. Falling tariff rates of telecom service providers . 2. Fall in the prices of mobile handsets. 3. Increase in the reach of service providers covering ever nook and corner of the country. 2. Current scenario of Mobile phone industry: Following are the highlights of mobile phone industry in India as on December, 2009: 1.
The penetration of mobile phones stands at about 30%. 2. 81% of mobile users are in urban area. 3. India? s rural teledensity stands at about 12. 6% 4. India has about 517 million subscribers by December, 2009. 5. It is forecasted that sales of mobile handsets in rural India will grow at CAGR of around 17% from 2009 to 2012 Above figures clearly indicate that although mobile phones might have made significant inroads into the urban market & urban market may start moving towards saturation but, still lot of potential is to be explored in the rural segment.
Market Share of different Manufacturers as on Dec-2009 is given below: As evident from above figures, Nokia is a major player in the Indian mobile industry today. 5 Also to understand the satisfaction level which users of above brands express, we look at a consumer satisfaction survey, the results of which are shown below. The survey was done on Indian Urban mobile phone users with Sample size of N=5,775. The source of this data is website:ww w . vitalanal yti cs. i n Model Users Likely to recommend LG 57. 6% Motorola 41. 0% Nokia 68. 6% Samsung 55. % Sony-Ericsson 65. 3% The result shows Nokia users are the most satisfied with their product followed by Sony-Ericsson and LG. The results of above survey are important since, mobile phone is a device which is frequently replaced in few years time, so, the brand which provides maximum satisfaction to users will be able to maintain high loyalty and hence, maintain its market share. A segregation of Indian market on the basis of price bands is shown below. We can see that mobile phones are avaible in various price bands from Rs. 2,000/- & less up to Rs. 50,000/- Source:http:/ /www. f onearena. co m/ mobile_phone_pricelist. html A close study of the product offered by various companies reveals following: 1. Companies like HTC, Apple, Vertu have products only for the high end market of Rs. 15,000/- and more. 2. On the other hand there are players like Usha lexus whose product fall in the lower category with their products being avaible in price range of minimum of Rs. 1,900/- to maximum Rs. 5,900/-. Also, Virgin mobile, Huawei etc fall in the same category. 3. Players like Onida have mobiles in lower prices (Rs. ,000/-) to middle price range (till Rs. 9,900/-). 4. Players like Motorola, Nokia, LG, Sony Ericsson have mobile phones avaible in all different price range and hence, are able to target all the different segments of the market. 7 3. Marketing Strategy: A holistic view (Nokia, Samsung): Nokia: Nokia, as a manufacture of mobile communication devices, was succeeded in administrating marketing strategies in India markets. The reason is that Nokia delivers better products which cater to the needs and preferences of Indian consumers.
Nokia – Made in India??? A detailed analysis In April 2005, Nokia India, a subsidiary of Finland-based Nokia, announced that it was setting up a manufacturing facility for mobile devices in Chennai, the state capital of Tamil Nadu in southern India. Nokia planned to invest US$ 100-150 million in the facility, where the production was expected to begin in the first half of 2006. Pekka Ala-Pietila, President and Head of Customer & Market Operations, Nokia Corporation said, “Establishing a new factory in India is an important step inthe continuous development of our global manufacturing network. 4 India was ideal for Nokia’s new production facility. Each mobile handset has more than 400 parts and the average production capacity of each manufacturing unit of Nokia is around 20 million units. This level of manufacturing involves a total of 8 billion components per annum, requiring strong logistical support. Nokia’s manufacturing facility needed to be located close to a major international airport or sea port for quick supply of components. India met all these requirements, and also enjoyed cheap manpower costs and proximity to the rapidly growing Asia Pacific markets.
Besides, Nokia was the market leader in mobile communication devices in India. The company has been carrying out sales & marketing, customer care and research & development activities in the country. Nokia considers India to be one of its most important markets. The company’s Code Division Multiple Access (CDMA)5 facility is located in Mumbai and provides software and technical support to CDMA consumers in India and other Asia Pacific countries. In 2004, Nokia was chosen as ???the most respected consumer durables company’ by Businessworld6.
The magazine wrote, “This Finnish company’s debut at the top of the heap says two things. One, that its strategies – including ones like developing a phone specifically for India – are respected. But, more importantly, Nokia’s win is also an endorsement of the importance of the ubiquitous cell phone as a durable in today’s world. After all, unlike its competitors, most of which offer a slew of durables, Nokia is mostly a cell phone company. ” 8 In 2005, Nokia was recognized as the ???Brand of the Year by the Confederation of Indian Industry, India’s apex industry association.
The company was chosen for this award because of its high brand recall, well established distribution channels and being ‘most preferred’ by the consumers. Enamoured of Nokia’s success in the Indian market, Harvard University had invited Nokia India to talk on ???How Nokia cracked open the Indian market? ‘ About Nokia Nokia was founded in 1865 by Fredrik Idestam in Finland as a paper manufacturing company. In 1920, Finnish Rubber Works became a part of the company, and later on in 1922, Finnish Cable Works joined them. All the three companies were merged in 1967 to form the Nokia Group.
In the late 1970s, Nokia started taking an active interest in the power and electronics businesses and by 1987, consumer electronics became Nokia’s major business. Nokia created the NMT mobile phone standard in 1981 and launched the first NMT phone, Mobira Cityman, in 1987. The company delivered the first GSM network to Radkilinia, a Finnish company in 1991, and in 1992, Nokia 1011 – a precursor for all Nokia’s current GSM phones – was introduced. In the 1990s, Nokia provided GSM services to 90 operators across the world.
Another significant move of the company during this period was the divestment of its non-core operations like IT. The company focused on two core businesses – mobile phones and telecommunications networks. Between 1992 and 1996, the company exited from the rubber and cable businesses as well… Nokia entered the Indian market in 1994. The first ever GSM call in India was made on a Nokia 2110 mobile phone on its own network in 1995. When Nokia entered India, the telecom policies were not conducive to the growth of the mobile phone industry.
The tariffs levied on importing mobile phones were as high as 27%, usage charges were at Rs. 16 per minute and, at these high rates, consumers did not take to mobile phones. Nokia also had to face tough competition from other powerful global players like Motorola, Sony, Siemens and Ericsson… Nokia was quick to learn from its mistakes and adopted strategies to regain its lost market share. Globally, during the first quarter of 2005, the company’s sales reached 7. 4 billion euros, with the company selling 54 million phones during the period.
In India, Nokia continued its leadership in GSM with a market share of 74% in March 2005. Nokia also surpassed Samsung in color mobiles in the GSM segment, recording a share of 55% in the same month 9 Nokia reorganized itself at the global level in 2004. At this point, a multimedia division was formed. The division’s Indian operations concentrated on promoting the concept of high- end telephones in smaller towns while going in for higher volumes in larger cities. The marketing division of the company concentrated on making distributors in small towns sell high-end products.
Though, the distributors were skeptical to start with, by the end of 2004, the process was streamlined and the results started to show. The Future Prospects According to industry analysts, by 2010, the mobile phones industry in India will be driven by voice, multimedia and mobile services for organizations. The teledensity in India was estimated to increase to 18. 2% by March 2009, with mobile subscription rising to 148. 77 million by that time. In many instances, the cell phone has become the only basic telephone link of a household/enterprise in India, rather than a landline phone.
It was turning out to be more economical and efficient than fixed line telephones. So, there was great scope for further expansion with reduction in the cost of ownership Samsung’s Strategy to Gain Market Share in The Indian Mobile Phone Market The Samsung management has initiated a market-mapping exercise to get into our fold distributors who have relevant knowledge of the market, credibility, a good distribution network and will therefore contribute in strengthening Samsung’s reach in the market, the new distribution strategy would take its penetration level in the market from the current 55 percent to 85 percent by the end of the year.
On the retail front, it was taking initiatives to increase the number of retailers enrolled as Samsung Mobile Privilege Partners (SMPPs) from around 100 in 2007 to around 400 by the end of the year. Single and multi-brand retailers had shown an interest in becoming SMPP. In the same month, the company launched five new mobile phone models and said that it would launch another 13 by the middle of the year. The models that were launched included multimedia phones, phones for corporate customers, and a comparatively lower priced model aimed at a bigger chunk of the market. The company as of early 2008, its mobile phones were priced between Rs. ,700 and Rs. 28,000, but that the company would launch more expensive mobile phones in the future The company also announced its new positioning with the new pay-off line ‘Next is 10 What? ‘ and that it had roped in a leading actor of the Indian film industry Aamir Khan (Aamir) as its brand ambassador. Aamir would also feature in its new ads. Announcing the major celebrity endorsement for the brand, HB Lee, president and CEO, Samsung (South-West Asia), said, “The Samsung brand stands for qualities of innovation, change, discovery, self-expression, and excellence in performance.
And these very same qualities are epitomized by Aamir Khan, whose quality and depth of work as well as versatility as an actor, have made him a much loved and respected actor in India today. We are indeed very proud and privileged to have him as our brand ambassador. ” With Aamir’s endorsement of Samsung, the fight for the mobile phone market had also become a four-way battle with other leading actors endorsing the rival brands – Shah Rukh Khan endorsing Nokia, Abhishek Bachchan endorsing Motorola, and, Hrithik Roshan endorsing Sony Ericsson.
According to Samsung, the mobile phone market in India would be 100 million units in 2008-09. With all these new initiatives, Samsung was confident of achieving its objective of cornering a 15 percent market share in the country. The company said that it had the necessary infrastructure to ramp up its production capacity at its manufacturing unit at Noida from the current 6 million units per annum, depending on the demand
Recently to have an impact on international prospective mobile phone users, Samsung has signed up Didier Drogba, playing in Chelsea Football Club, as its 2008 Mobile Phone category brand ambassador. As part of this partnership, Drogba will appear inSamsung Mobile adverting campaigns for a period of one year, and will also make public appearances to promote Samsung? s products and corporate activities. “Extending our association with Chelsea FC, we are now thrilled to partnerwith Drogba as Samsung? s brand ambassador,” says Chi Won Suh, CEO, Samsung Middle East and Africa region. Africa is a key market for Samsung Electronics, with immense growth potential, and we are confident that our association with an internationally and locally acclaimed football star like Drogba will bring us closer to the football loving population throughout the African continent. ” Football sponsorship is one of the pillars of Samsung? s sports marketing strategy. It is derived from the belief that sport especially football unites people of all ages, 11 genders and races. Samsung bada to rival Android, Linux Samsung entered into the mobile OS arena with bada.
The software, whose name is based on the Korean for “ocean,” is designed to be open and will compete directly against rivals like Android or LiMo. It will be based on universal standards and won’t consider even core aspects of the OS off-limits: developers can not only use contacts, the dialer and other utilities but extend them with new features of their own. Most details are left vague, but bada will have a central app store. Carriers will also have the option of customizing the OS to suit their own tastes.
Samsung expects the very first device using bada to show in the first half of 2010 along with the initial app store. More phones should be ready by the second half of that year while the app store will expand to 30 different countries, including key countries in Europe. A more formal unveiling is due in the UK for December and will be followed by first looks for developers both in December and in January. The news backs analyst claims of Samsung moving to its own platform and adopting modern open platforms, including bada.
If fully representative, it also signals the likely ends of Symbian and Windows Mobile at Samsung, as the forecast would have Symbian gone entirely by 2011 and Microsoft’s OS at just 20 percent by 2012 where it makes up 80 percent of Samsung phones today. Such a gesture will also render closed platforms like OS X iPhones and Windows Mobile the relative minority in numbers, though not necessarily market share. Recent happenings were the Samsung Corby, which is a full-touch handset that places users at the centre of the social media revolution with full support for a wide range of social networks. The new mobile compliments the Company? existing touch screen strategy “touch for every lifestyle” by broadening the market and targeting the youth audience. The Corby represents a complete makeover for the youth segment, with its eye- catching design, which marks a significant break from the way full touch phones are usually designed. The Samsung Corby is notable for both its body design and colours; it comes with bold colour options With Ghazini swiping the box office Samsung has enchased on its brand ambassador Amir Khan by launching Ghazini mobile games on selected models which is a smart and innovative approach of marketing strategy. 2 The future prospects of Samsung mobilesd oesn? t seem gloomy with the above developments and with time to come there would be a tough competition with its rivals. So Next is what? 4. Pricing Strategies: 1. Penetration Pricing: This pricing strategy is followed by companies with the intention to maximize their market share. They believe that a higher sales volume will lead to lower unit costs & higher long-run profit. Example: China Mobile Phones in India. This is one of the fastest growing industries in India. China mobile phones are cheap and offer the same features as a expensive obile from some other well known manufacturers. Rs: 12000 China-JN269 Rs: 9900 China-MT3300 Rs: 9800 China_Elitek_85 02 Rs: 9500 China-GT-MD900 Rs: 9400 China-6500S Rs: 8700 China_GT_Q71 8 Rs: 6137 China-Elitek- X6019 Rs: 5200 China_Elitek_X6 011 Rs: 4900 China_ELITEK_X6 010 Rs: 4500 China_Elitek_X6 012 A few samples of Chinese mobiles are shown above. Only problem that exist for the Chinese mobile phones is that consumer generally have a low quality perception associated with them and hence, do not trust their quality.
However, they are well suited to people who want to enjoy features of a high end mobile without having a budget for the same. 2. Predatory Pricing This pricing strategy is followed with the intention to wipe out the competition. 13 Example: In the year 2003, LG and Samsung along with Reliance came up with Rs. 500/- mobile scheme where both handsets along with connections were available for Rs. 500/-. This was something which revolutionized the mobile phone and telecom industry. 3. Perceived value Pricing: In this case the pricing is done based on the customer? perception about the company and its product. Perceived value is made up of several elements such as buyer? s image of product performance, the channel deliverables, warranty, quality and even softer attributes such as supplier? s reputation. Example: A good example for this kind of pricing is Apple iPhones. They are offered in price range of Rs. 31,000/- to Rs. 42,500/-. Their price is set based on image of brand apple & customer affinity towards it. Comparable mobiles phones from other manufacturers like Sony Ericson, Nokia are offered at relatively cheaper price.
For example comparable N series mobiles from Nokia are offered at prices below Rs. 30,000/- (Except for Nokia- N9 & Nokia-8800 Carbon). Also, SONYERICSSON??? Satio is offered for Rs. 31,000/- & all other Sony brands are available for prices below it. Apple can set higher prices since; it feels that its customers will be ready to pay for it based on its perceived value. 14 Apple-iPhone-3G-S-32GB Price | Rate Rs: 42,500/- 4. Value Pricing: This is pricing strategy in which a company wins loyal customers by charging a fairly low price for a high quality offering. Example: Nokia E 63 Mobile. This mobile is priced at Rs. 11,260/-.
This mobile offers a large number of high end applications like: Web-Browsing, Email, Data Network, GPRS, GPS & Navigation and lots of other facilities apart from serving the basic mobile functions. At the same time it has a sleek body & robust structure. A image of this mobile has been shown below. 15 5. Product form pricing: Different versions of the same product are priced differently. Examples: Nokia-5000 is priced at Rs. 4,300/- Whereas, Nokia-7210C-Supernova is priced at Rs. 4,800/- offers almost the same features. The reason for difference in pricing is due to the sleek structure of Nokia-7210C. 16 6. Promotional Pricing: 1.
Special Event Pricing: In this case special prices are offered during special occasions like festivals to increase the sales. Example: Last Diwali (September, 2009) Samsung offered discounts on Samsung Omnia mobile phone. Their market price at that time was Rs. 33,990/- whereas their discounted price for Diwali was Rs. Rs. 31,990/-. 2. Low-Interest financing: Company can offer low interest financing to customer. This will reduce the burden of initial cost to the customer. Example: In 2009, Nokia piloted a scheme in two Indian states where it sold handsets on a weekly instalment of 100 rupees ($2) over 25 weeks period. 3.
Psychological Discounting: This is done to make the customer believe that product is priced cheaply or some cases just break the price barrier that customer has in his mind like price at price Rs. 999/- which is priced just below Rs. 1,000/-. 17 Example: MOTOYUVA – W156 prices at Rs. 1,099/- Samsung Guru- Rs. 2,999/- 5. Current Trend in Mobile Industry: — With saturation in the urban market, growth in Indian mobile market will be driven by an increased focus on the rural market, aggressive promotions, and handset bundle offers. — As of March 2007, mobile subscribers in rural India accounted just 20% of the Indian mobile subscriber base.
However, it is forecasted to grow at a CAGR of more than 47% during 2007 to 2010. — In order to remain competitive, the mobile industry could see several mergers and acquisitions, roll out obligation and substantiate equity holding in more than one telecom company. — The major growth in mobile phone subscribers will be seen in C’ Circle and B’ Circle in short-term. — Enormous opportunities are emerging for the low cost handset manufacturers along with low tariffs, infrastructure development for mobile communication. — Rural India will account for around 35-38% of the total mobile handset sales by 2010. 8 The industry’s spectacular growth in India is attracting the attention of several international brands. Glenn Smith reports SECTOR INSIGHT The growth of India’s mobile sector has not gone unnoticed. Last year, Virgin Mobile agreed a deal to enter the market, and Japan’s DoCoMo bought into mobile operator Tata to stake its claim in the fast-expanding industry. India offers astounding growth statistics. In October 2008, according to the Telecom Regulatory Authority of India (Trai), 10. 4 million Indians signed up for a phone service, pushing the national total to 363. million, a penetration of 31. 5 per cent. Only 10 years earlier, India had a mere 880,000 phones, most of them landlines,for one billion people. Today, fixed-line phones account for only 10. 5 per cent – 38. 2 million subscribers and this absolute number is slowly declining. Wireless operators, meanwhile, are surging ahead. Many first-time phone buyers are opting for mobile, and will drive the total subscriber base to 500 million by 2010,according toTrai. The expansion has been fuelled by recent economic prosperity, but the accelerant is an ever-increasing affordability of handsets and services.
Mobile phone service costs have plummeted. In March 1999, the effective charge was more than 15. 32 rupees (US$0. 31) per minute, which fell by half in 2000, again in 2001 and repeatedly dropped until today – at less than a rupee, it is believed to be the cheapest rate in the world. The sector’s expansion is not expected to be hit by the economic slowdown. “Market growth is moving away from the cities and going into the villages and rural areas,” says Shankari Panchapakesan, executive director of mobile services, The Nielsen Company, South Asia. The macroeconomy won’t impact this, because rural people are using phones in ways that make a difference in their life, how they work, how they educate their children, and how they access information. ” Fishermen, for example, use phones to find outlets for their catch. Women earn a living with phone exchanges. Carpenters carve their numbers on village walls. For handsets, the undisputed leader is Nokia. The Finnish telephone giant has been in India since 1994, and has invested in three R&D labs, making facilities and distribution partnerships.
Naresh Priyadarshi,head of Synovate Business Consulting, says Nokia has 90,000 distributors in India, giving it a 90 per cent retail footprint. There are also 30,000plus stores that sell Nokia exclusively. Nokia has concept stores in at least seven major cities. Together, India’s retail outlets sold 132 million handsets worth 700 billion rupees in 2008, according to Synovate. Nokia’s share of value was 59 per cent, followed by 19 Sony Ericsson with a distant eight per cent, Samsung with seven per cent and Motorola with six per cent.
Smartphones account for 24 percent of sales, according to Synovate, with mid-priced feature phones taking 28 per cent, and the remainder – 48 per cent – being ultra-low-cost phones. Handset makers see ultra-low-cost phones as the road ahead despite the razorthin profit margins. Already, sales of cheap handsets are depressing average prices. Euromonitor estimates that unit prices fell 50 per cent between 2004 and 2007 to an average of 2,808 rupees. To put handsets within reach of India’s rural poor, phone makers have had to rethink product design. The Nokia 1100 included a torch, alarm clock and a radio.
Nokia’s entry-level phones are now priced at 1,500 rupees. Spice Mobile halved that with its People’s Phone, priced at 599 rupees, including lifetime prepaid activation. To bond with rural users, Nokia is launching a subscription-based service called ‘Life tools’ with information on agriculture and education. Such phone services will serve as the first online experience for rural Indians. Among affluent urban users, value-added-services (VAS) for feature phones are seen as the way forward. Synovate reports VAS at 50 million rupees in 2008, and fore- casts 70 per cent annual growth to push that to 165 million rupees by 2010.
It is this fast-growing, rapidly diversifying market that is attractive to overseas firms, though they should not expect much profit in the short term Some important facts about Rural Coverage:- ??? About 70 percent of India’s near 1. 2 billion inhabitants live in rural communities ??? rural teledensity was a mere 12. 6 percent ??? Rural wire line connections totaled 10. 68 million at the end of December, down by 2. 46 percent from 10. 95 million at the end of Septemberr 2009 ??? The rural wireless subscriber base hit 93. 15 million at the end of the year, up 2. 38 percent from 90. 8 million at the end of September ??? Department of Telecom and BSNL have signed an agreement to provide 861,000 connections to individual users and government institutions through rural and remote exchanges by 2014 ??? To promote rural rollout by the private operators, the Indian government imposed Universal Service Obligations (USO) on the country’s operators to build a fund that can finance the rollout of services in areas where there isn’t an obvious or pressing business case to do so ??? The first phase of mobile infrastructure deployment under the USO fund scheme commissioned six different service providers to deploy 7,871 towers ??? However, by the end of October 2009, only 1,934 towers had been installed 20 ??? The second phase, complete with a tender for an additional 11,049 sites, has yet to be started ??? The phased rollouts associated with the USO scheme require an additional 40,875 mobile towers to be erected ??? Add this to the number of towers required for the five new 2G networks, additional coverage and capacity for existing operators, and the introduction of 3G networks, and there is a huge demand for new cell sites right across the country 6. Future of Mobile Industry: Demand Among Poor Farmers Keeps an Industry Growing as Other Sectors of the Economy Are Jolted. Rural customers “have been hungry for mobile phones for a long time, so demand will remain unaffected,” by the global jitters, said S. P. Shukla, chief executive officer of the mobile business at Reliance Communications India Ltd. , India’s second-largest cellular company by number of subscribers, Even amid the global economic slowdown, one Indian industry continues to boom: selling cellphones to the rural poor.
Economists have slashed Indian economic growth forecasts for this year and the stock market is in the doldrums. But cellphone companies are signing millions of new subscribers a month, making India the fastest growing mobile-phone market in the world. There is no sign of a slowdown yet: figures to be released later this month are expected to show that new subscriptions in January reached a record 11 million. The demand for cellphones is coming mainly from rural consumers, who typically earn less than $1,000 a year. These buyers haven’t been affected by plunging stock and real-estate prices or tighter bank lending since they typically don’t own land and don’t borrow.
A large majority of them don’t have access to regular landline phone networks — there are only about 40 million landline subscribers in India — so once cellular coverage comes to their towns or villages they scramble to get their first phones. In the village of Karanehalli, a cluster of simple homes around an intersection of two dirt roads about 40 miles from India’s high-tech capital of Bangalore, Farmer K. T. Srinivasa doesn’t have a toilet for his home or a tractor for his field. But when a red and white cellular tower sprouted in his village, he splurged on a cellphone. While the way his family threshes rice — crushing it with a massive stone roller — hasn’t changed for generations, his phone has changed the way he farms. He uses it to decide when to plant and harvest by calling other farmers, to get the best prices 1 for his rice, coconuts and jasmine by calling wholesalers, and to save hours of time waiting on the road for deliveries and pickups that rarely come on time. “Life is much better with the cellphone,” he said from his rice paddy in the shadow of the new tower. “I bring it with me to the fields and anyone can reach me here. ” Mr. Srinivasa, like close to half the 800 people in his village, uses Idea Cellular Ltd. as it was the first to bring them service. He paid the equivalent of about $60 for his Nokia phone, and spends about $6 each month for service. Like most rural users, Mr. Srinivasa uses his phone to make voice calls — he doesn’t know how to text message or to download emails. On average rural Indians use their phones around 8. hours a month, up 10% over the past year. The story is the same across rural India, home to more than 60% of India’s population of 1. 2 billion. China, Indonesia and Brazil also continue to show solid growth in cellphone sales. The continued expansion of the cellphone industry in India stands in sharp contrast to most other industries here. Textile and software exporters are struggling. India’s brand new malls are sparsely populated and the sales of cars, trucks, tractors and motorcycles have declined in recent months. But the cellphone industry recorded more than 10 million new subscribers in December, up from eight million a year earlier.
The industry’s overall subscriber base grew 48% in 2008 to 347 million customers. Rural customers “have been hungry for mobile phones for a long time, so demand will remain unaffected,” 22 7. References: http://en. wikipedia. org/wiki/Communications_in_India http://www. icmrindia. org/casestudies/catalogue/Business%20Strategy/BSTR174. htm www. vitalanalytics. in http://www. fonearena. com/mobile_phone_pricelist. html www. mobile-prices-india. com http://www. mobile-prices-india. com/Nokia_Mobile_Phones. php http://web. ebscohost. com http://www. india-cellular. com/Mobile-Prices. htm http://proquest. umi. com/pqdweb? index=8&did=1635821441&SrchMode=1&sid=3&F t=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1264756239& amp;clien tId=135690 Pricing Strategies Mobile Phone Industry Download this Document for FreePrintMobileCollectionsReport DocumentReport this document? Please tell us reason(s) for reporting this document Spam or junk Porn adult content Hateful or offensive If you are the copyright owner of this document and want to report it, please follow these directions to submit a copyright infringement notice. Cancel . .This is a private document. Info and Rating Reads:3,873Uploaded:03/07/2010Category:How-To Guides/Manuals>GadgetsRated:Pricing Strategy Mobile Phones Industry India. Welingkar Institute of Management Development & Research. . ricing strategy mobile phones industryericsson mobilesamsung pricingmajorprice stratgetry(more tags)pricing strategy mobile phones industryericsson mobilesamsung pricingmajorprice stratgetrygurutoolslow coststrategy mobileproduct formchina mobiles(fewer) . pryprv.. Ads by Google Sign Up for an Ad-Free Scribd ???Remove all ads. Never see ads on Scribd again. No ThanksShare & Embed Related Documents PreviousNext 3 p. 50 p. 5 p. 35 p. 23 p. 13 p. 3 p. 3 p. 3 p. 60 p. 61 p. 15 p. 1 p. 1 p. 1 p. 1 p. 1 p. 7 p. 2 p. 30 p. 21 p. 1 p. 53 p. 6 p. 26 p. 23 p. 1 p. 6 p. 32 p. 2 p. 24 p. 5 p. 47 p. 2 p. 1 p. 26 p. 4 p. 7 p. 2 p. 3 p. 71 p. 17 p. 1 p.. More from this user PreviousNext 10 p. 30 p. 15 p. 22 p. 10 p.. Recent Readcasters .Add a Comment
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