| Log in
Photo Credit: Shah Junaid/VCCircle
TMT

Indian handset makers tie up with telecom operators to fight Chinese rivals

24 October, 2017

Indian handset manufacturers are partnering with telecom service providers as part of efforts to fend off attacks from Chinese rivals, who are devouring their market share in the smartphone segment.

Domestic handset maker Micromax on Wednesday said it was tying up with Vodafone Group Plc’s local arm to offer a smartphone, effectively at a price of Rs 999 if the buyer retains the device for three years.

Karbonn had formed a similar partnership with Bhart Airtel Ltd for its smart feature phone A40, priced at Rs 1,399 if the buyer keeps the device for a certain period, after Reliance Jio Infocomm Ltd launched a smart feature phone at a starting price of Rs 1,500. Bharti Airtel is also in talks with Intex for similar offerings.

Analysts say these moves are aimed at preventing the Chinese players, who have already taken over a dominant share in the smartphone market, to capture the feature phone segment as users look to switch from second-generation mobile phone services to 3G and 4G technologies.

Data from Counterpoint Research show that both Micromax and Karboon have lost market share in the handset category over the past six quarters. Chinese firms Itel and Xiaomi have climbed up the charts during this period.

The market share of Micromax and Karbonn fell to 7.1% and 3.2%, respectively, in the April-June period this year from 10.2% and 6% in July-September 2016.

Preliminary data for the July-September quarter this year show that Micromax is trailing behind South Korean electronics giant Samsung and China’s itel in the feature phones category with a market share of 11%.

“The move [tie-ups] is a survival strategy for several domestic handset manufacturers as they look to defend their territory against Chinese players,” says Tarun Pathak, senior analyst at Counterpoint Research.

However, Pathak said that the lock-in period that such tie-ups entail might prove counterproductive as customers tend to look at immediate benefits rather than long-term ones.

He also pointed out that if the strategy succeeds, it would go a long way in cementing an active user base for both the handset maker and the telecom operator.

For telecom companies, such tie-ups may help them take on Reliance Jio. Pathak said that Reliance Jio, with its content and cheaper call and data rates, has hit other operators hard. “Players such as Vodafone and Airtel believe that if they get more subscribers via such partnerships, they can offer cheaper devices and compete with Jio,” he said.

Micromax declined to directly comment on the issue but said that the Vodafone partnership was just the start. “We are working with other telecom companies to bring smart feature phones to the market to offer similar experiences as Reliance Jio,” a company spokesperson said.

Like this report? Sign up for our daily newsletter to get our top reports.


Leave Your Comment
Exclusive: Lava plans first IPO by an Indian handset maker in a decade

Exclusive: Lava plans first IPO by an Indian handset maker in a decade

Ankit Doshi 6 months ago
Homegrown mobile handset maker Lava International Ltd is set to file a draft red...
Smartphone maker Intex hires bankers for IPO

Smartphone maker Intex hires bankers for IPO

Bruhadeeswaran R 1 year ago
Consumer electronics maker Intex Technologies (India) Ltd has picked two bankers...
Bharti Airtel acquires spectrum rights from Aircel for $525M

Bharti Airtel acquires spectrum rights from Aircel for $525M

TEAM VCC 2 years ago
Bharti Airtel Ltd has signed a Rs 3,500-crore ($525 million) spectrum trading...
No Comments

Indian handset makers tie up with telecom operators to fight Chinese rivals

Powered by WordPress.com VIP