Iconet Communication in talks with overseas mobile phone retail chains

Chennai: Iconet Communication Pvt Ltd, an Rs22 crore city based mobile phone sales and service chain, is in talks for a joint venture with three overseas companies engaged in similar trade.

Declining to give their names AK Midha, director, technology said that while two of the chains were based in the UK the third one was from Austria.

Elaborating on the rationale for a joint venture he said, "Already big players are coming into this space and in a short time will dominate the market. By the year end the joint venture plans will be frozen."

According to him the coming days are going to be difficult for shops with single businesses - sales or service alone. With margins thinning, shops selling just the handsets will find it hard to sustain themselves. On the other hand without a customer base the service outlets will face difficulties when a big player offering both - sales and service- arrives on the scene.

Though Iconet is into both the business lines- sales and authorised service centres for Nokia, Motorola, LG, Sony Ericsson and Samsung- it has not been able to expand its reach for want of trained hands and funds. "One service centre needs four technicians," says Midha.

Unlike Iconet that has sophisticated equipments to diagnose faults in a mobile phone, most other service centres depend on the human interface. As a result attrition levels are also high.

Hence Iconet decided to look out for a partner that could offer fast training methods, fast phone servicing technology and also funds.

"We know the market and have the Iconet brand that is known in the market place," adds Midha.

One the joint venture fructifies the company will go for a national footprint. "When the sales volume increases we can also underwrite sizeable amount of talk time with a mobile telephony company and sell our own branded/co-branded prepaid cards-fresh and recharge," he explains.

Today prepaid cards dominate nearly 82 per cent of the cell phone market. While the percentage growth will be small, in terms of subscribers the addition will be in good numbers.