The Hindu Business Line : High handset prices scupper Sanyo's foray

Sources close to the company told Business Line that with some of the CDMA service providers in the country keen to provide low-priced models to drive growth in the segment, the feature rich and the higher-priced Sanyo models were not found to be cost effective. Unlike GSM (Global System for Mobile Communication) players, CDMA (Code-Division Multiple Access) service providers in the country bundle together the tariffs with the handsets and subsidise the handsets to lure more customers.

Some of the high-end Sanyo's mobile handsets are learnt to be extremely feature rich which provide the facility to download entire movies or e-books and have several other value-added features as well. Incidentally, the mobile handset foray of Sanyo is not part of the BPL-Sanyo joint venture. Talks between Sanyo and the service providers apparently did not lead to any significant outcome because of pricing issues, sources said.

BPL plans

While there are no takers for Sanyo mobile handsets, BPL, a joint venture partner with Sanyo in the consumer electronics' space, is planning to get into manufacture of mobile handsets. The BPL Group had last year said that as part of its growth strategy, it had identified eight areas including foray into mobile handset manufacturing.

Sources said that one of the reasons for a foray into mobile handset manufacturing is that BPL is a well-known brand among customers, especially in places where it was a mobile service provider. In the area of mobile handset manufacturing, BPL was also keen to tie up with a foreign partner for technology as well as for manufacturing the handsets here.

According to CDMA Development Group, an industry body, the number of CDMA subscribers in the country has reached 44.5 million as of March this year, which is more than double the subscriber base over last year. But the growth had been dominated by "ultra low cost" handsets, the industry body said.

India has a teledensity of about 18 per cent. There are about 13 suppliers of CDMA based handsets in India with LG leading the pack with a market share of nearly 55 per cent. Last year, LG alone sold 12.5 million handsets. According to an industry official, about 25 per cent of the total activations per month are for CDMA.