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Push Button and Feature Phones: Big in Volume, Low in Value

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VoicenData Bureau
New Update

The telephone equipment or the electronic push button phones market in India

can broadly be divided into three categories–the BSNL-MTNL market, the private

basic services market and the retail market. The retail market would also

comprise of PBX manufacturers. Besides, the retail market includes both the

simple push button phones as well as feature phones. While the simple electronic

push button phone market was estimated to be worth Rs 291 crore (11.64 million

sets), phones with such enhanced features as memory, hands-free dialling, and

caller line identification had a market worth Rs 54 crore. Even though there was

an addition of around 1.1 lakh sets in the feature phone market in 2000-01, the

market in value terms actually decreased largely because of a 25 per cent

decline in the average price of a feature phone. The feature phone market size

in 1999-2000 was around 2.5 lakh sets worth Rs 55-60.

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EPBT Market Segments

Highlights
  • Electronic push button phone market size: Rs 291 crore
  • Feature Phones: Rs 54 crore
  • Number of push button phones sold: 11.64 million
  • Number of feature phones sold: 3.6 lakhs

BSNL and MTNL were the biggest buyers of the electronic push button phones

accounting for 70 percent of the market. The retail segment and the PBX

manufacturer brought around 25 percent of these phones. The private basic

operator segment was an emerging market though its share was not more than 5

percent.

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It is expected that in the near future, demand in the private basic operator

segment would overtake the demand in the retail and PBX segment and account for

30 percent of the total market.

Price

The market for both the simple electronic push button phones as well the

feature phones was highly competitive with high overhead costs. While the former

sold at an average price of Rs 250, the latter had an average price of Rs 1,500,

down 25 percent from the 1999-2000 price of Rs 2,000. While at the lower end of

the market, feature phones cost as little as Rs 500, phones with a combination

of features cost upwards of Rs 2,000. There was hype around Caller Line

Identification (CLI) feature, but that was confined to the metros. Otherwise,

the most sought-after features in these phones were hands-free dialling, memory

and LCD display. The CLI phone market did not grow much because of factors like

compatibility of the local exchange and the extra charge that users had to pay

for activating CLI feature in their phones.

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Trends in the Feature Phone Market

Among the Indian brands Orpat remained the cheapest one, though it was hit by

even cheaper imports from China. Chinese products were popular but solely

because of their low costs. They did not pose a threat to the market where

people were looking at buying features rather than saving money. Buyers looking

at features were usually unwilling to take risks with unknown brands. But,

phones donning the name ‘Panaphone’ a Panasonic namesake, appeared to be

doing good business as was felt by many established Indian manufacturers. The

grey market remained significant but lost its dominance because of the growing

legal sale of the phones popular in this market. Panasonic and Sony were the

most sought-after phones in the grey market.

There was not much activity in the ISDN phone market. The size of the market

in terms of value was in the region of Rs 35-40 lakh. Not more than 5,000 phones

were sold in this segment. Of these, around 1,000-1,200 phones were sold in the

retail market; bulk buyers like the switch vendors bought the rest. The base

price of an ISDN phone available in India was Rs 7,500. The main segments of

buyers in the retail segment included corporates, SOHO and residences. As for

the players, Ascom cornered the major portion of the market.

EPBT Manufacturers

While Bharti Teletech and its group companies made a modest profit of Rs 6

crore, the other major player Tataphone saw red with a loss of Rs 13 crore. The

downturn in the fortune of Tataphone was due to a drop in prices and an increase

in the cost of production. Prices dropped because of stiff competition among the

players as also due to a reported move by some of the manufacturers to form a

cartel for BSNL bids.

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