Indians smash cell-phone sales
record By Siddharth Srivastava
NEW DELHI - A new world record has been
set in India. On October 19, an auspicious day to
purchase new products in the country, mobile-phone
maker Nokia reportedly sold more than 400,000
handsets, a number not achieved in a single day
anywhere else in the world, including China, one
of the most rapidly growing mobile-phone markets.
The firm's previous sales high was about
100,000 phones in a single day.
On
average, 150,000 new cellular-phone connections
are sold in
the
country every day (about 6 million a month),
across all brands, including Samsung, LG,
Motorola, BenQ, Ericsson and Bird.
It may
be recalled that it is festival season right now
when Indians, high on the annual Diwali bonus
combined with the auspicious shopping period
Dhanteras, go on a spending spree, with mobile
phones being one of the most desired consumer
goods.
It is a gadget that is now
accessible to people at almost every income level,
with most handset manufacturers aggressively
playing the price-cutting high-volume game.
Airtime rates in India are among the cheapest in
the world.
In a nation where the World
Bank has estimated that close to 80% of the
population survives on less than US$2 a day,
mobiles have become the "poor man's phone".
The Indian retail market for mobile phones
is pegged at Rs750 billion ($750 billion) and is
growing at more than 20% per year. The number of
mobile-phone users in India reached the 100
million mark in April, making it the fifth-largest
market in the world. The subscriber base is
expected to grow to 300 million by 2010. At the
beginning of 2000, India had just 1.6 million
cell-phone subscribers.
China, of course,
remains far ahead, with the world's largest
mobile-phone market by volume, and one of the
fastest-growing. According to government
estimates, the country will have close to 450
million mobile-phone users by the end of the year
and 600 million by 2009. Almost 40 million people
signed for their first mobile phone in the 12
months to July.
Apart from low cost, one
of the main factors facilitating the spread of
mobile phones in developing countries such as
India is the huge number of people who have never
had a phone of any kind. In developed countries
such as the United States, fixed lines are the
norm for the overwhelming majority, reducing
demand for cell phones considerably.
Mobile phones also provide communication
for people in remote areas where there is limited
fixed-line telecom infrastructure.
It is
estimated that connecting a fixed line in a remote
area costs $1,400, while a mobile connection costs
about a third at $500. The convenience of
over-the-counter purchase of connections and lower
costs being passed on to consumers in the form of
cheap rentals in a highly competitive market, and
good finance schemes, make cell phones a very
desirable alternative to fixed lines.
Last
year, the Indian music industry earned more than
$35 million - 20% of its revenues - from mobile
music. Media houses such as Star, Sony and BCCL
have formed separate divisions to tap into mobile
content. Star chief executive officer Peter
Mukerjee said mobile telephony should eventually
bring in 30% of the company's revenues.
In
2005, the number of legitimate music-download
sites reached 335, up from 50 two years ago. In
just two years, the volume of music made available
online by record companies has increased more than
sixfold to more than 2 million songs. Mobile music
downloads in the domestic market are currently
valued at $50 million, according to Soundbuzz
India.
Royalties worth about $15 million
were paid to the music industry in the past 18
months. About 400,000-500,000 ringtones are
downloaded daily.
It is estimated that the
Indian mobile gaming market, which generated $30
million in revenue in 2004, will rise to $336
million by 2009.
According to a report by
industry consultants ARC Group, worldwide mobile
entertainment revenues are forecast to grow to $25
billion by 2007, driven by the games sector. In
the Asia-Pacific region alone, mobile gaming is
expected to generate nearly $2 billion in revenue
by 2008. In East Asia, mobile gaming has generated
more than $850 million.
Mobile commerce is
another area receiving attention. Recent Internet
and Mobile Association of India figures estimate
that the domestic e-commerce market will cross the
$600 million mark by 2006-07, a nearly 100%
increase over last year and more than 300% over
2004-05.
Siddharth Srivastava is
a New Delhi-based journalist.
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