Mobile industry

1. INDUSTRY PROFILING :
MOBILE INDUSTRY
UNDER THE GUIDANCE OF PROF
A.K. SHARMA
Submitted by –
Dishant Hans (22)
Mohit Goyal (33)
Piyush Jain (43)
Shivank Rastogi (57)
Vaibhav Agrawal (66)

2. Table of Contents
HISTORY OF MOBILE INDUSTRY
REASONS FOR CHOOSING MOBILE
INDUSTRY
MAJOR PLAYERS IN MOBILE
INDUSTRY
PRESENT SCENARIO OF INDIAN MOBILE
INDUSTRY
RECENT DEVELOPMENT & TECHNOLOGY
6 KEY DRIVERS OF THE INDIAN MOBILE
INDUSTRY
GROWTH OF MOBILE INDUSTRY

3. HISTORY OF MOBILE INDUSTRY
Till 1984 telecom services were under state
government control with the department of Post and
Telegraph which was later crafted out as
Department of Telecommunication (DoT) in
1985.
After government of India announced National
Telecom Policy in 1994 to allow Private players.
Mobile industry held ground way back in 1995 with
only a few subscribers. At that time it was
considered as an item of luxury and not as necessity.
INDUSTRY PROFILING – MOBILE INDUSTRY

4. Indian telecom industry has penetrated market to 43%
in last 10 years and so the Indian mobile industry has
undergone a revolutionary change during the past few
years to become one of the leading mobile markets on the
global map.
 Essar launched first mobile in India and the first
mobile operation was provided by MODI Telstra.
 Sluggish growth thereafter due to unfriendly telecom
policies only 1 million users till 1998 but then comes new
regulations in 1999.
 . The number of mobile phones crossed five million by
2001 and doubled to 10 million in 2002.

5. INDUSTRY PROFILING – MOBILE INDUSTRY

6. o As here in graph we can see how mobile industry
take stride in 2005 and continued in 2007 as well
while landlines scoring almost same in users from
2005-2007.
o In 2008-09 the overall telecom equipments revenue
in India stood at 136,833 crore during the fiscal, as
against 115,382 crore a year before.
o The mobile handset market is expected to show
steady growth through 2014 when end user sales
surpass 206 million units.

7. REASONS FOR CHOOSING MOBILE
INDUSTRY
Mobile industry in India is the fastest growing
industry with lot of opportunity to grab ahead.
Factors responsible for the growth of the industry:
 Growing income of the middle-class families,
 Popularity of mobile based services like online ticket booking
 Low rate mobile connection plans
 Technological advancement
India is the fastest growing telecommunications
industry in the world, it is currently holding a
market of 706.69 Million (Dec 2010) mobile phone
users and is projected that India will have 1.159
billion mobile subscribers by 2013.
INDUSTRY PROFILING – MOBILE INDUSTRY

8. The mobile industry in India has been an attractive
destination for the global mobile phone manufacturers
from the very start.
 The number of emerging vendors in India grew to 68
and these mobile handset providers captured 41.2% of
total shipments (sales) for the first time during the July-
Sep 2010 quarter.
Apart from mobile phone manufacturers, the industry
has also seen the growth of mobile phone carriers,
mobile phone application developers, mobile phone
content providers and so on
INDUSTRY PROFILING – MOBILE INDUSTRY

9. There were more than 28 new handset brands
which started selling handsets in 2009 making
total to 63 and these new players account for over
12.3% of handset sales which is quite significant.
The local players account for 17.5 %  percent of
sales now
Some of the major players are
Nokia
Samsung
LG
HTC
MAJOR PLAYERS IN MOBILE
INDUSTRY
INDUSTRY PROFILING – MOBILE INDUSTRY

10. On the basis of technology, Nokia is the
dominant player on the GSM space, accounting
for 63% of the installed base (phone’s currently in
use) while LG rules CDMA with 48% of installed
base market share.
The Chinese brand G'Five emerged as number
two player in terms of unit shipments market
share while Korean handset manufacturer
Samsung stood at number three in 3Q 2010.
INDUSTRY PROFILING – MOBILE INDUSTRY

11. MARKET SHARE IN INDIA
Even after facing tough competition from
companies like- Micromax and G-Five, Nokia is
having a market share of 65% and Sony Ericsson
is at second place with market share of 12%.
INDUSTRY PROFILING – MOBILE INDUSTRY

12. DISTRIBUTION IN TERMS OF
UNITS
INDUSTRY PROFILING – MOBILE INDUSTRY

13. GROWTH RATE OF INDUSTRY
INDUSTRY PROFILING – MOBILE INDUSTRY

14. PRESENT SCENARIO OF INDIAN
MOBILE INDUSTRY
India constitutes approximately 10 percent of
world wile sale of mobile devices. “Market is
supported by global and local players as well.”
“Growing influence of local handset players in
the low-end segment has forced high-end
companies to sell phones at a discounted rate.”
Mobile device sales in India are forecast to reach
138.6 million in 2010, an increase of 18.5 percent
over 2009 sales of 117 million units. The mobile
handset market is expected to show steady
growth through 2014 when end user sales
surpass 206 million units.
INDUSTRY PROFILING – MOBILE INDUSTRY

15. Cellular phone penetration in India stood at 45
percent in 2009, and the market is entering into
a second phase of growth, with replacement sales
increasing from 45 percent in 2009 to 50 percent
of total sales in 2010.
Sales of mobile has shown an aggregate increase
of about 50 %.
Despite very high competition Mobile industry is
growing at a very high pace.
INDUSTRY PROFILING – MOBILE INDUSTRY

16. LEVEL OF COMPETITION
Global mobile manufacturing firms are facing tough
competition from local mobile manufacturing firms
New entrants are using various techniques like- low
price, innovative products etc. to capture market share.
Companies like Micromax, G-Five etc are using low price
strategy to gain market share. These companies are
offering products similar to products of other high-end
companies but at much lower prices.
 With the entry of low priced Indian mobile handset
player like- Micromax, Lemon mobiles etc, focusing on
value conscious consumers has intensified competition
in the Indian mobile device market.
INDUSTRY PROFILING – MOBILE INDUSTRY

17. Due to this strategy, Micromax is now India’s third-
largest GSM mobile phone vendors with a market share
(in term of units sold) of 6 percent after Nokia (62
percent) and Samsung (8 percent).
INDUSTRY PROFILING – MOBILE INDUSTRY

18. MARKET STRUCTURE &
SEGMENTATION
Low-end products
Low-end products have price band of
approximately Rs.1000 to Rs.3000. This segment
contributes to approximately 15% of total Indian
mobile device market. The average selling price
(ASP) of a mobile device is approximately $52, with 85
percent of devices sold costing below $100.These
phones are generally meant for basic functions.
These products are meant for people for whom
cell phones are just another communication
device.
INDUSTRY PROFILING – MOBILE INDUSTRY

19. Mid ranged product
These products have price band of Rs.3000 to
Rs.10,000. Almost all companies offer products in this
range. These types of products have various feature
like- good music speakers and compatibility, good
mobile camera and social networking application.
These products are used by Mobirati Users, Paragmatic
Adopters and Social Connectors

20. High-end products
High-end segment have price band of above
Rs.10,000. Local player’s like- Lemon mobile,
karbonn mobile etc don’t target this market. This
segment constitute products like- smart phones,
PDA and high-tech mobile handsets. Smartphone
are the fastest growing market segment,
registering over 50 per cent growth in 2010 over
2009. Smartphone sales are expected to grow 60
per cent in 2011 over 2010.
INDUSTRY PROFILING – MOBILE INDUSTRY

21. GOVERNMENT REGULATIONS &
LEGAL ASPECTS
In 1994 the government of India announced National
Telecom Policy which allowed private players to enter
in the market of telephony in India but the policy was
not friendly enough to attract the private companies
for a longer duration.
Anti-Dumping Duty
Anti dumping duty of up to 266 per cent was imposed
on imports of IT equipment also used in the telecom
sector to guard the domestic industry from cheap
Chinese and Israeli shipments. The mobile industry
was also suffering from the same in India due to
cheap Chinese mobiles which disturbed the whole
Indian mobile market especially rural. Anti- dumping
duty made the price of the Chinese or Israeli mobiles
comparable with the domestic players.
INDUSTRY PROFILING – MOBILE INDUSTRY

22. RECENT DEVELOPMENT &
TECHNOLOGY
3G Auction
With the auction of 3G spectrum in 2010, some of
the telecom service provider companies are all set
to launch their 3G services which has
transformed the mobile industry. Mobile phone
companies have launched their 3G compatible
handsets to redefine the Indian mobile market.
Bluetooth and Wi-Fi technologies enabled
handsets were in the most demanded mobile
phones and now the demand for 3G enabled
handsets has also risen up.
INDUSTRY PROFILING – MOBILE INDUSTRY

23. RECENT MERGERS AND
ACQUISITIONS
Activities in the industry
Idea, the countries fifth largest telecom service
provider company, acquired Spice Telecom in
2008 and the deal consisted of 4 transactions.
It acquired the MODIs’ 40.8% stake in Spice (for
Rs 2,720 crore).
It launched the mandatory 20% open offer for the
Spice shareholders, jointly with Telekom
Malaysia International (TMI).
INDUSTRY PROFILING – MOBILE INDUSTRY

24. The merger of Spice with itself and it offered a 14.99%
stake to TMI through a preferential allotment.
The Idea-TM combine launched the open offer at Rs
77.30 jointly with TMI, which now holds 39.2%in Spice.
It was the fourth largest merger and acquisition deal
involving an Indian entity in India

25. FOREIGN INVESTMENTS
India has become an extremely attractive market
for Original Equipment Manufacturers (OEMs)
in most segments of electronics production, with
an estimated 11% of the global market share by
2015.
At the current growth rate, the Indian telecom
equipment manufacturing sector is set to become
one of the largest globally by 2020.

26. FOREIGN DIRECT INVESTMENT

27. 6 KEY DRIVERS OF THE INDIAN
MOBILE INDUSTRY
Further cuts in regulatory costs (license fee, USO
fund contribution, ADC, etc)
Infrastructure sharing to result in speedy rollouts of
networks and wider coverage
Lower cost of equipment (with most of the global
equipment manufacturers setting up operations in
India)
Low wireless penetration of about 22.5% compared to
world average of 50%
Favorable demographics – rising young population
coupled with growing middle-class to drive
consumption power
Increasing affordability – low tariffs, easy payment
plans and low priced handset

28. SWOT ANALYSIS
SWOT Positive Negative
Internal
Factors
Strength
• High technological
advancement
•Large customer base
•Increasing disposable
income of the people
•Greater number of
Telecom service providers
thus high demand of
mobile phones
•Government policies to
support the industry
Weakness
•Highly Competitive
•Intensive R&D required
•Low end products yields very less
margin
INDUSTRY PROFILING – MOBILE INDUSTRY

29. External
factors
Opportunity
• Rural market is very less
penetrated so great
opportunity ahead
•3G auction has paved the way
for highly sophisticated
mobiles.
•I-pods, Smart-phones are
highly demanded
•QWERTY keypad mobiles with
various applications like GPA,
Maps 3G features.
•Android compatible mobile
phones.
•Microsoft office and pdf
readers enabled phones.
•Government policies for
mobile banking provides great
opportunity ahead
Threats
• Very lucrative industry, and
low barriers to enter in the
industry
•Unorganized sector
•Need to look for each social
class
•Need to keep abreast with the
technology
INDUSTRY PROFILING – MOBILE INDUSTRY

30. KEY OPPORTUNITIES
With fastest growing population in India, it proves
to be one of the largest market in the world. The
telecommunication market is growing with
tremendous pace which provides immense
opportunities for mobile industry.
The present penetration of mobile industry in
India is only about 43% which is highly
contributed by urban market, thus rural market is
yet to be tapped
INDUSTRY PROFILING – MOBILE INDUSTRY

32. PORTER 5 FORCES MODEL FOR
MOBILE INDUSTRY
Barriers to Entry
The mobile industry is free of barriers, and any
organization can enter as long as it fulfills the
general compliances of the government. Absence
of any barrier in the mobile industry makes it
highly competitive, where in the companies need
to keep them attached with the customer to get
the pie of the market
INDUSTRY PROFILING – MOBILE INDUSTRY

33. Threat of Rivalry
A segment is unattractive if it already contains
numerous strong or aggressive competitors.
Mobile industry in India has a number of strong
competitors but it has a lot of opportunity to
grow, with only 43% of the market penetrated
yet. The companies which impose high threat to
the young entrants are:
Nokia
G’ Five
Samsung
Lava

34. LG
Micromax
Videocon
Fly
ZTE
Threat of substitute product
Low end mobile phones in India are highly
substitutable. With people demanding more and
more sophisticated mobile phones, the low end
product in the industry are facing threats of
substitution.
INDUSTRY PROFILING – MOBILE INDUSTRY

35. Threat of suppliers’ growing bargaining
power
Threat of suppliers’ bargaining power is the
ability of the supplier to raise prices or reduce
quantity supplied. At the low end mobile
segments, the suppliers have high bargaining
power with low brand equity products. If high
end products are taken into consideration then
the suppliers bargaining

36. power is very low because the brand equity of the
products that are available in this segment is
very high.
Threat of Buyers’ growing bargaining
power
The companies are competing on price in India
with growing companies in the industry. Thus,
the buyers’ bargain power is becoming very high.
The companies in the industry are also suffering
due to unorganized sector, which is eating up
their market share.
INDUSTRY PROFILING – MOBILE INDUSTRY

37. MARKET FORECAST WITH
MACROECONMIC ASSUMPTIONS
At present, India with more than 700 million
mobile subscribers is ranked number 2 in the
world mobile market and it is expected that with
in no time it will cross 1 billion mark with the
present growth rate. The innovations in the field
of telecom sector are preparing market for mobile
industry as well.
The Mobile TV, Mobile commerce, 3G, PDAs are
some of the examples that clearly show the
bright future of the Mobile industry ahead
INDUSTRY PROFILING – MOBILE INDUSTRY

38. Mobile is always seen as a front runner in
claiming India’s position in digital landscape.
The mobile density in India is in upwards of 40
%  with urban region having tele-density 50.3%
and rural with only 28.2%, whereas Internet
penetration continues to lag between 4-6%. Thus
there is a huge scope to capture the rural market
and urban market as well.
INDUSTRY PROFILING – MOBILE INDUSTRY

39. GROWTH OF MOBILE INDUSTRY
The graph below shows the growth in number of
towers to support telecom services in India with
361000 towers in 2010 and is expected to grow by
20% pa. The increase in number of towers
represent increase in the penetration of the telecom
industry and hence the mobile industry in India.
INDUSTRY PROFILING – MOBILE INDUSTRY

40. Mobile internet usages are also on upheaval trend
worldwide due to increasing sales of iPhone and
other high end phones
Social networking site penetration is 68.5% reach
with 130.1 average minutes per visitor and 13.0
visits per visitor. The intensity of penetration of
social networking sites is expected to be more
than 75% by 2015 which will raise the demands
for mobile phones that can support these sites
India produce a large scope for mobile commerce
with 91% of the transactions happening in India
by the way of cash and cash continuing to be the
most preferred payment mode for the common
man in India-marked-to-market mobile
applications will play a significant role in making
m-commerce successful
INDUSTRY PROFILING – MOBILE INDUSTRY

41. INDIA, A HUB FOR EXPORTS
Nokia is exporting 30-40% of its annual
production at the Sriperumbudur (Chennai)
plant to countries in Southeast Asia, ie.
Singapore, Thailand and Malaysia, and is
planning to expand its exports to other
continents.
LG’s manufacturing unit in the outskirts of Pune,
Maharashtra exports mobiles to countries in the
Middle East, Africa and Asia. The company has
earmarked 10 million handsets from its unit in
India.

42. India is geographically central to growing markets
in the Middle East and Africa, making the time
span from design-to-market shorter than if the
mobiles were to be transported from Europe or
other production zones.
An added advantage is that indirect labor costs in
India are about the same as in China but direct
labor costs are about 30% lower.
Mobile manufacturers plan to make India a hub
for exporting mobiles to the Middle East,
neighboring countries and Europe.
Foreign Direct investments has helped India to
reveal its potential of becoming a global hub in the
transnational production networks

43. Imports
India imports 8 million handsets every month.
Import of unbranded Chinese handsets into the
country has increased 90 per cent to 38 million
units in the current year against 20 million units
in 2009-10 .
According to the Indian Cellular Association
(ICA), the import of unbranded Chinese handsets
has grown four-fold in three years from 5.5
million handsets in 2007-08 .
 India has banned the import of mobile phones
without a unique international mobile equipment
identity (IMEI) number in 2009.

44. 
570100309 67043 SONY
ERICSSON
32993536371125238SAMSUNG
3276070731 538375 NOKIA
1131643904 656490 MICROMAX
504828871 286067 LG
195411215 123540 LEMON
200038198 146408 LAVA
80146449 54700 KARBONN
506443202 25409 HTC
340843650 233410 G-FIVE
45683435 40800 FLY
4030201341 2758502 CHINESE
1577076671 118373 BLACKBERRY
18464395 769APPLE
Total value INRQty (Pcs)Mobile Brand
GSM & CDMA Mobile Phone Importers Data

45. REFRENCES
Department of Telecom, India
Telecom Regulatory Authority of India
India-cellular Association
Internet and Mobile Association of India
Mobile Future Forward
Indian Telecom Industry, Corporate Catalyst
India
Spectrum Auction in India, IIMA
www.siliconindia.com
Voice and Data online, CIOL
INDUSTRY PROFILING – MOBILE INDUSTRY