Mobile phone market likely to cross 300 mn handsets this year

Mobile handsets market in India is expected to cross 300 million devices this year while only 46 million are likely to be built locally, says a report. “The domestic market for mobile handsets is expected to cross 300 million devices in 2015, while the number of devices being manufactured locally is expected to be only 46 million,” said a report by Ficci-EY titled ‘Speeding Ahead on the Telecom and Digital Economy Highway’.

Citing the example of Vietnam, which has emerged as a global hub for manufacturing of mobile handsets because of favourable incentive schemes and stable regulatory environment, it said there is a need for incentives for setting up of new handsets and tablets manufacturing units in the country. 

In spite of India’s market growing at a robust rate, almost 83 <g data-gr-id="36">per cent</g> of the demand is met via imports, while domestic production and manufacturing continue to lag, the report said. “It is imperative that measures are taken to address this mismatch and reduce dependence on imports. Correcting this imbalance will not only lead to saving of foreign exchange but also result in build-up of local capabilities and job creation,” it said.

To further the efforts under ‘Make in India’ programme, DeitY has established a joint task force of industry representatives and government officials with an aim to achieve production of 500 million handsets by 2019, it said. 

“The task force aims to rejuvenate the mobile handset and component manufacturing ecosystem in the country and targets to create additional employment opportunities for 1.5 million people,” it said. 

It recommended bringing handsets under provisions of ‘Goods of Special Importance’ of the Central Excise Tax Act, 1956, thus capping the maximum VAT levied by states at 5 per cent and also endorses a 10-year tax holiday on a block of 15 years on all profits and gains for manufacturing in the mobile phone industry. Moreover, total LTE devices shipped to India reached 2.2 million units during the first quarter this year, with 4G smartphones accounting for 97 <g data-gr-id="43">per cent</g> of these shipments, research firm CyberMedia Research said.

According to CMR’s India quarterly data, 4G-LTE device shipments more than doubled in the said quarter, growing 108 <g data-gr-id="34">per cent</g> quarter-on-quarter to 2.2 million units. The total LTE device shipments in the country stood at 1.06 million units during October-December 2014 quarter. “The 4G/LTE device space is getting interesting as every quarter passes. The market more than doubled <g data-gr-id="35">quarter-on</g>- quarter and we see this momentum continuing for at least a few more quarters,” CMR Telecoms Practice Lead Analyst Faisal Kawoosa said.

Other than the need to appear distinctive in the market and move with worldwide industry trends, device vendors are also trying to create a ‘cult’ followership in the emerging Broadband Wireless Access (BWA) technology space, he added.  “With the kind of expected paradigm shift in quality as well as types of services after RJio goes ‘live’, device vendors are busy showcasing their competencies in the 4G/LTE space, not only to have an early mover advantage but also to position themselves as reliable vendors in the space,” he said. 

Korean firm Samsung registered 27 per cent market share in terms of units shipped, displacing Apple from the top slot. The US-based firm moved to the third spot with 15 per cent share in the said quarter, after China’s Xiaomi that had 17 per cent share. 4G/LTE data cards contributed 2.64 per cent of the total devices shipped, growing 287 per cent quarter-on-quarter. The segment was led by ZTE with 77 <g data-gr-id="32">per cent</g> share, followed by Alcatel (17 per cent) and Huawei (5%).