Triggering a fresh round of tariff war, the country's sixth largest mobile operator, Tata Teleservices Ltd and Japan's NTT DoCoMo, will launch GSM handsets for less than Rs 1,000 in the rural markets. The move will mark the company's entry later this month into the GSM segment, for which an investment of $2 billion has been earmarked.
The Rs 900-handset would be the cheapest GSM device bundled with talk-time in the market. Analysts see this as the first major push by the Japanese major into the Indian market. The $40-billion NTT DoCoMO has operations in nine Asian markets, including in South Korea and the Philippines.
Toshinari Kunieda, senior vice-president and managing director, global business division, NTT DoCoMo, in an exclusive interview with FE said, "Through the $20-30 handset bundled with talk time, we would penetrate the rural markets. We expect average realisation per user (Arpu) of as low as Rs 95-Rs 150 ($2-$3) in the rural area". Around 60% of subscriber addition in the mobile space is from the rural areas, where the teledensity is just about 17%.
NTT DoCoMo has around 50% market share in Japan, with an Arpu of around $25.
He said the company's focus is on voice-based services in India, unlike in Japan, where it is focused on data-based services. "Though the metropolitan cities of Mumbai and Delhi are very similar to Japan and it is easier to introduce our data services there, it is the rural India which poses the actual challenge. The majority there doesn't have a handset, and SMS is probably the only data used by the rural people at this point," Kuneida explained.
The company would procure the ultra low-cost handsets through contract manufacturing from Chinese vendors.
Source:---http://in.biz.yahoo.com/090610/50/batprc.html
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