Lifetime free and handset sales

Posted on | January 21, 2006 |

90% of the new subscribers enrolling for the 2-3 years and lifetime-free mobile schemes are very low-end subscribers or first-time users.

Nearly 30% of the demand comes from rural and semi-urban India. New subscribers in these areas have started looking at mobile phones as a necessity and buy very basic phones. Nokia’s basic model 1100 sells the highest in rural India. The lack of finance may be the other reason people in those areas opt for low-end mobile handsets. Low-end mobile margins are wafer thin for the handset makers, as low as 6-8%.

Further, there is nearly a 40% difference between the new subscriber numbers doled out by telecom service operators and actual mobile handset sales. The difference is apparently on account of the pre-activated schemes sold by various telecom service providers, which does not necessarily convert into a sale for telecom handset makers immediately.

These pre-activated schemes add up to the telecom service operators’ new subscription numbers at the end of every month. But, for telecom handset makers, the numbers translate into sales only when subscribers buy these pre-activated schemes.

Source: ET

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