Chinese firms enter branded handset market in India

The Chinese are now entering the telecom handset market in India.

China-based ZTE, the world's sixth largest mobile handset manufacturer, and Huawei, will be entering the mobile handsets retail market in India by the end of the year.

The company is aiming at 20 per cent of its global revenues from the Indian market in the coming years.

Both companies plan to retailing their CDMA mobile phones under their own brand names, marking a shift from the practice of bundling the phone with a mobile service provider offering.

The two currently have tie-ups with CDMA service providers who buy unbranded pieces from them, brand it and then bundle it with their service.

ZTE has similar plans. So far, the company has tied up with operators like Reliance Communications, Tata Teleservices, Vodafone, Spice Telecom and Aircel for their bundled offerings.

''We plan to enter the retail market by the end of this year, after we launch in China and the US,'' said D K Ghosh, chairman and managing director, ZTE Telecom India.

The starting price for ZTE's products will be $20-25 (Rs900-1200) and the company is exploring tie-ups with retail stores and chains. It expects to ship about 10 million units this year and foresees the India business overtaking its Chinese business. India currently contributes about 10 per cent of its revenues of around $700 million (Rs 3,220 crore).

The move to delink CDMA phones from service providers is being pushed by Qualcomm, which owns the CDMA technology.

''India will be the first country where this concept will be launched.

Operators as well as handset manufacturers are already working on it and by early next year consumers will be able to avail of this,'' said Thia Rajagopalan, director of business development, Qualcomm CDMA.

China currently has a tele-density of 75 per cent while India's is
les than half of that at 30 per cent.

The company had reaped $700 million in revenues for handsets as well as telecom equipments from the Indian market in the year-ending 2007. Its global revenues for the period were $7 billion.

ZTE has bid for state-run BSNL's GSM equipments for 93 million lines.Till date, it has sold 100 million handsets globally. 10 million out of the 16 million handsets sold in India were in the CDMA segment.ZTE aims to sell CDMA and GSM handsets in India in 60:40 ratio in the next few years as against the current 70:30.

At present, the company's handsets are not retailed on a stand-alone basis; they come bundled with connections from CDMA players Reliance Communications and Tata Teleservices and GSM player Vodafone Essar.