Advertisment

Assembled mobiles a threat to grey mkt

author-image
CIOL Bureau
Updated On
New Update

Nandita Singh

HYDERABAD: According to TRAI, the Indian cellular subscriber base has risen five fold from 3.1 million in December 2000 to 15.2 million in June 2003. But India, the country of more than a billion people, still remains mobile hungry.







Companies who provide mobile phones at affordable prices — sub Rs 5,000 range are better prepared to tap this large segment. One way of providing low priced phones is through assembling of the mobile phones. This segment is all set to rise and can also lead to disappearance of grey market of mobile phones. Hyderabad-based Surana Telecom is one of the few companies to have entered this segment. Cyber News Service met with Narender Surana, MD, Surana Telecom Ltd., to find out about the company’s future plans and the Indian mobile industry.





What was the reason behind your company’s entry into the assembling market?


The demand for mobile phones is huge. The market can widen to a great extent if the price barrier is removed. Assembling in India is one of ways to bring down the prices, bringing down the cost of the instrument by seven percent whereas the quality remains the same.


We have a factory in Cherlapally where we manufacture optical fiber cables and other telecom products. In the same set up with an investment of Rs 1.5 crore we have created an infrastructure for assembly, inspection and servicing as per the guidelines by BSNL and LG. It has the capacity of assembling 15,000 units a month. Currently, we are doing 3,000 units. This will be scaled up to 10,000 units a month by December this year.





What brands are you assembling?


Right now we are doing seven brands and the list will expand at the rate of a brand a month. The process is simple — the request comes from a distributor who arranges for the procurement of components with a guaranteed buy back arrangement and the companies are comfortable with the quality manual we follow at our assembling unit. Currently, we are supplying to distributors in Mumbai, some cities of Karnataka and Hyderabad. Shortly, we will begin supplying to distributors in Delhi as well.





How will it cut down on the grey market?


In assembling phones we get a tax advantage. There is no customs, no excise and the sales tax for interstate sales in just one percent. This helps the distributor save six percent- seven percent over the regular import route. The cost-benefit is passed on to the consumer so why would anybody want to go to the grey market when a quality branded product with proper warranty is available at the same price?





How do you see the future outlook of the assembling segment?


For Surana Telecom, the future outlook is promising. Right now we are working at bringing down the cost of the built-in camera phone. Our team is also working at using Indian regional languages in the mobile phones. We are collaborating with a Korean company for the purpose. Of our total turnover 80 percent will be in CDMA assembling.


















(CNS)

tech-news