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Monday, October 7, 2002

Cellphones not just rich man’s toys
Peeyush Agnihotri

MORE than 55 per cent of cellphones sold in India are being purchased by lower to middle income groups, says Alcatel, a French telecom major. Mohit Kapoor, country manager, of the company, points out that at present there are 20 to 25 per cent purchasers in A- segment, 35 to 40 per cent in A+ segment, 15 to 20 per cent in B/B+ segment, 5 to 10 per cent in C segment and more than 5 per cent in D segment.

Mohit says that mobile phone penetration in Punjab is ‘pathetically low’ and, at least, 30 to 40 per cent of penetration is needed here. However, the region is quality and value conscious though people here still rely more on the grey market.

In fact, grey market continues to be a major issue. Pankaj Mohindroo from Agrani Convergence says more recently the grey market has taken a beating when duties on the handsets were slashed from 28 per cent to 14 per cent.

In spite of a heady growth in the cellular services market, the share of the unauthorised market in the overall market has shot up to 89 per cent in second half of 2001, according to an IDC report on cellular handsets market in India.

In the long-term, the legal channel sales for cellular handsets is expected to grow at a CAGR of 87 per cent to reach 8.9 million units by the end of the year 2006 though the unauthorised market will still account for 55 per cent of the handset market share.