Business - 3G handset makers to ring in a Rs 3500 offering

With 3G mobile services, which provide high-speed downloads of data, movies and videos, around six month away, mobile phone makers are getting ready to offer handsets for as little as Rs 3,500, against the currently available minimum price of over Rs 8,000.

Chinese telecom giant Huawei Technologies is already in talks with leading Indian operators of GSM mobile services to sell a 3G entry-level phone within $80 to $100.

Company executives said bulk deals with operators would push down prices of 3G handsets further. Huawei has supplied these basic 3G phones to operators in the Hong Kong market.

South Korean electronics giant LG Electronics has the KU250 3G phone model, which is positioned as one of the cheapest phones in this category around the globe. “We will launch an adaptation of this model in India for around $100, said Arun Arora, senior business group head of LG Electronics India.

Motorola India also expects prices to fall dramatically. “We expect the prices of phones to come down to Rs 4,000-5,000,” said Lloyd Mathias, senior director, sales distribution and marketing.

“Initially, they might be available at Rs 5,000-6,000 at the top level,” he added.

Motorola has about three 3G models that range from Rs 14,000 to Rs 19,000. “With the policy guidelines issued last week for 3G, we will look at bringing in more 3G handsets in the market,” Mathias added.

The availability of reasonably priced phones has already made many experts change their forecast of the size of the 3G market from 40 million to 70 million by 2012 to100 million and 150 million (when India is expected to have 700-750 mobile subscribers up from roughly 300 million today).

“About 15 to 20 per cent of the mobile phones in India are 3G- enabled. So there is already a market waiting to be converted,” said Sunil Dutt who heads Samsung India's mobile handset business.

Dutt added that 30 per cent of the mobile phones sold in the country cost over Rs 4,000 and that is a market that will be able to afford a 3G handset at $100.

Also, contrary to common belief, 3G will not be a premium service. Operators said a start-up package could cost around Rs 299, which is roughly what consumers pay for a fixed broadband service. Unlimited downloading may require subscribers to pay Rs 500 to Rs 1,000 a month.

“3G will not be an elite service but a service for the middle class and it will bring about a broadband wireless revolution,” predicted Cellular Operations Association of India (COAI) director general T V Ramachandran.

Last week, the government announced the 3G policy guidelines that will give 5 to ten operators per service area licences and spectrum to launch the service. Service providers will be chosen through an auction process.