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Siemens to enter low-end cell phone market

This will mark the company's foray into the low-end segment of the cell phone market.

T O D A Y

• Dodging nukes • Siemens at low-end • Seagate strategy • Hofinsoft equity

Elaborating on the company's cell phone marketing plans in the country, Siemens Telecom Director (Operations) I B Mehra has said "This (the C-10 model) is positioned to be a sub-$100 (Rs 4,300) phone. But the change in currency rates between the Deutsche mark and the US dollar has increased the cost slightly. But it will still be positioned to take on some of the lower priced phones."

"Since September last year, the (Indian cellular handset) market took a sharp turn in favour of low-priced handsets. The initiative was more with vendors like Motorola and Nokia. This trend continued until March-April this year," he explains.

Siemens India, which until then had products only in the middle (above Rs 13,400-14,000) and top range (Rs 22,000 and above) decided to enter the lower-end market.

It concluded a deal with Spice Telecom - the cellular telecom provider in Punjab and Karnataka - with a Rs 9,000 package for the S-6 model, which has been phased out of Siemens AG's production line since.

Added Mehra, "We have followed an aggressive strategy in the last three months. Most of the 30,000 cellular handsets we sold in the period September 1997-October 1998 were in deals in the last three months."

He says that Siemens Telecom has already received queries from domestic cellular telecom operators for the purchase of 30,000-50,000 handsets over a year.

Siemens has a current market share of some 15 per cent in the domestic cell phone supply business.

In February this year, the company, which also markets wireline and fixed wireless (or wireless in local loop) phones, had said it is aiming to capture a 40 per cent share in the one million telephone set domestic market.

"We are targeting sales of 400,000 fixed telephones this year (October 1997-September 1998). This will take our market share to 40 per cent up from last year's 22-23 per cent," Mehra had said then.

He revealed that Siemens Telecom has recorded sales of some 350,000 telephones in September 1997-October 1998. "We have set a target of 500,000 phone this operating year (September 1998-October 1999), which we hope to take up to a million by 2000-2001," he said.

Tatafone is the market leader in the phone set market with a 26-27 per cent share. BPL is a close second with an approximately 21 per cent market share.

- Compiled from the Indian media

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