Reliance Communications To Now Retail Gsm Handsets

[Nirvana 4]

5 May, 2008, 0000 hrs IST

Economic Times

Anil Ambani’s Reliance Communications (RCOM) is readying itself for a big splash into the Rs 20,000-crore GSM handset retailing. It will enter into the new avenue in a month by selling GSM handsets in the existing eight circles of Reliance Telecom, a part of RCOM, by the end of next month. It has signed agreements with major handset vendors, including LG, Samsung, Motorola, Sony Ericsson, Spice, Fly Mobile and HTC. It is expected to sign a similar agreement with Nokia shortly.

The move is expected to create ripples in the organised handset retail market, as the company would achieve significant discounts based on the huge order size, analysts say. RCOM has been distributing cutting-edge and affordable CDMA handsets at the entry price of Rs 777, the cheapest handset in the world. RCOM has also launched colour handsets at Rs 999.

The company plans to sell GSM handset in all of its 2,500 retail outlets. The target is to sell 15-20 million handsets in the first year of operations. The handset market is expected to cross 100 million this year against the last year’s estimated size of 70-75 million units.

When contacted, RCOM spokesperson said: “The company has built significant capabilities in CDMA handset retail business, which can be readily utilised to channelise a diverse suite of consumer electronic gadgets. We have always believed in giving better than the best quality and prices to the many million Indian consumers, and the same philosophy is the guiding force whenever the company plans to evaluate opportunities for portfolio expansion.” RCOM is the second largest handset distributor. It sold over 15-16 million CDMA handsets last year.

According to sources, the foray into the GSM handset retailing is part of the company’s nationwide launch of GSM business by the end of this year. “RCOM aims to grab a pie of the GSM handset market. Also, it plans to use its bulk buying capability to offer the best GSM handset bargain and aims to tap the new subscribers coming on mobile networks,” said a source. Over 27 million new subscribers were added on the country’s telecom networks between January-March 2008, out of which 10 million subscribers were added in March alone. At this rate, the new subscribers during the current fiscal is estimated to cross the 100-million mark.

For the launch of GSM business, RCOM has placed equipment order of $1 billion. It doesn’t need to spend additional money for passive infrastructure and other associated expenditure like any other typical greenfield foray. With mobile number portability in the offing by year-end, RCOM also plans special deals for handset replacement customers to shift to Reliance GSM from their existing service provider. Furthermore, the company would tap the estimated monthly churn of 5% plus on GSM networks to pull them to its GSM services.

Industry sources said the entry of Reliance in this segment may lead to consolidation of the handset retail sector. The network of Reliance would be over 10 times the existing nationwide chains like The Mobile Store and Subhiksha, whose presence is limited to 200-250 odd outlets.

Edited May 4, 2008 by Nirvana

[Honest 836]

^^^

Wow, thats a great news my dear friends. At last we will have better choice & vast variety of choosing GSM handsets to be used with Reliance GSM service.

Cheers !

[carbinem4 2]

that will increase the customer base as well

cheers

[Saurav 22]

The best will be if they offer discounts and good offers.

[@ksh@T 20]

just expect ZTE's classic and just classic . . . thats it . .

[petar 15]

read it carfefully. it has tied up with all handet vendors.... nokia , htc , motorola, LG, samsung.

It may also offer ZTE & other chinese handsets... there are all level of customer so they might keep low end models as well.

[Arun 795]

Reliance Communications to source 60 million handsets for Rs.3,000 crore

LiveMint.com

Saturday, May 17 2008 - 12:13 AM IST

New Delhi: India’s second biggest mobile phone company by subscribers, Reliance Communications Ltd, or RCom, plans to procure more than 60 million GSM phone handsets worth more than Rs3,000 crore over the next three years, as it prepares to launch its GSM-based phone services by March 2009.

“RCom plans to procure around 20 million GSM handsets every year, and sell them across 3,000 retail outlets owned by the company,” said a person close to the sourcing deal, but did not wish to be identified. “These handsets could cost anywhere between Rs500 and Rs700 (each), depending on whether they are bundled or sold stand-alone,” he added.

A senior executive with a handset maker chasing the contract said RCom has already started talks with vendors including LG Electronics Inc., Samsung Electronics Co. Ltd, Huawei Technologies Co. Ltd and Fly Mobile Ltd.

GSM, short for global system of mobile communications, is a popular platform for offering phone services in India, the world’s fastest growing market for mobile phones. The GSM market serves 75% of about 200 million mobile customers in India, and adds about 8 million users every month. RCom, a part of the Reliance-Anil Dhirubhai Ambani Group, has already received the licence and radio spectrum for offering GSM-based phone services in the country.

An RCom spokesperson declined to comment on the handset contract.

The company is in discussions with equipment makers to procure networking equipment and switches worth $5.6 billion (about Rs23,800 crore) for rolling out a countrywide GSM network, as reported by Mint last year. India’s market for telecom switches and networking equipment is worth Rs45,000 crore annually, according to the Telecom Equipment Manufacturing Association. This excludes the telecom handset business, which is worth Rs23,452 crore, according to research firm IDC India Ltd. Naveen Mishra, an analyst at IDC India, said RCom could use bulk procurement as a tool to bring down handset costs. “RCom gives the specifications and promises assured business to the vendors, which helps in negotiating a good deal,” he said. “In fact, RCom was the first operator to start bundling of handsets with new phone connections, which brought the entry cost for new users to as low as Rs700.” By procuring handsets in bulk and bundling them with new connections, RCom plans to compete with rival Bharti Airtel Ltd, which serves more than 60 million subscribers through GSM technology. Currently, more than 87% of RCom customers are serviced on networks running on code division multiple access, or CDMA, technology.

Reliance Telecom Ltd, a unit of RCom, already runs a relatively-small GSM-based operation—with some 5 million customers—in eight of India’s poorest states.

With three new telecom operators including Datacom Solutions Ltd (the telecom subsidiary of Videocon Ltd) and Unitech Ltd seeking to roll out GSM phone networks, the market for telecom equipment including handsets is expected to grow at more than 30%.