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Mobile Phones: Rural Handsets

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VoicenData Bureau
New Update

Low cost handsets are good for the emerging economies. It not

only helps in bridging the digital divide but also helps in economic growth of

the country. For ULCH and LCH to succeed one has to look at profitable models

for all players-chip manufacturers, handset vendors, and operators. These were

some of the deliberations at the Next Generation Low Cost Handsets (LCH) Asia

2007 was held in New Delhi from 4-5 September 2007. The event brought together

leading operators, handset and contract manufacturers, technology and content

providers, and application developers to address commercial and technical

strategies to harnessing entry level, ultra low cost handsets (ULCH), and low

cost 3G solutions to penetrate emerging markets. It also assessed challenges

faced by operators and provides solutions to them to maintain profitability and

ARPU maximization in highly competitive emerging markets.

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Key

Discussions
  • Marketing ULCH,

    entry-level, and LCH to price sensitive customers

  • Market trends,

    opportunities and developments for LCH

  • ULCH as an economic

    opportunity for the masses

  • Reducing the impact of

    the initial cost of becoming a mobile subscriber

  • Define user requirements

    for entry-level handsets

  • Reducing the total cost

    of ownership

  • Developing a low-cost

    distribution strategy and after market support

  • Examine low cost 3G

    opportunities

  • Discover how to foster

    closer collaboration between operators and handset vendors for

    operator led handsets

Discussions and Presentations



The first day of the event was dedicated to discussions and presentations on
the market opportunities and business strategies for emerging markets. India's

potential as major market for low cost handset was also explored in these

discussions. During the course of discussion an important fact-low cost

handsets (below $50) made up around 50% of the total handset market in 2006 in

India-was shared with the delegates. Other points that were discussed include

mobile phones have permeated into smaller towns, cities, and villages thus

expanding the opportunity for adoption and use of additional services. As there

is a great opportunity for mobile VAS industry to grow, mobile technologies can

provide forms of interactive services to end users (non literates in the rural

market) whom the PC could never reach and rural people could benefit from

mobile-enabled services in areas such as education, healthcare, finance,

governance, and infotainment. Rural areas, which lack means of dissemination of

information, will adopt such services if they are available at affordable

prices.

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The crux that came out of first day's discussion was the

market is expanding and therefore one needs to understand the demands of new and

future consumers. New consumer expectations are heterogeneous and are dictated

by their attitude to technology, style, brand, and price.

Major Points



Evolution of handsets and wireless services, innovative emerging market
services/total cost of ownership, and affordable connectivity in emerging

markets were the major points on which the discussion on the second day was

centered. The fact that telecom remains largely an urban and suburban growth

story was also discussed. Despite the realization that a 1% increase in telecom

penetration results in a 3% increase in GDP growth, rural areas continue to

remain under-penetrated in most south Asian countries.

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The role of local manufacturing was also discussed as it is the

key to cost cutting, since high volume supply can be supported only with local

manufacturing and all major handset vendors have established local manufacturing

in Asia. The importance of China, SE Asia, and India as the key players in

guiding manufacturing strategy of vendors was also highlighted.

Other issues that were discussed revolved around infrastructure

for manufacturing, distribution, tax free movement of parts, components and

complete phones are the basic requirements to provide phones at low cost.

Sandeep Budki



sandeepb@cybermedia.co.in

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