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Mobile handset makers have increased phone prices by 10-15 per cent across various models due to a weakening rupee.
Most of the handsets sold in India are imported barring a few low-end models being manufactured here by the likes of Nokia.
The rupee has weakened about 17 per cent against the US dollar since January, hitting an all-time low Rs 52.73 last week, forcing handset makers to increase price.
The biggest impact has been on the top-end phones. Research In Motion, for example, would be a revising BlackBerry price by 6–10 per cent on select models within the next 10 days. Samsung said it has increased prices of mobiles between 3-5 per cent last week, which translates to Rs 40-800 increase across select feature phones and smartphones.
Indian brands have also been hit as all of it is imported from China. “We have already increased our price by 5-7 per cent and if the situation continues to be like this then we will have to look at another round of price increase. We will not be able to sustain the price levels,” said Mr Sunil Raina, Chief Marketing Officer, Lava International.
According to Mr Pankaj Mohindroo, President, Indian Cellular Association, Indian brands are facing a double whammy as the Chinese currency is hardening thereby making exports from that country expensive. “There is a 15 per cent increase in handset price across the market. Only 32 per cent of the market is being catered to by locally manufactured products so it is inevitable that phone makers pass on the dollar appreciation cost to consumers,” said Mr Mohindroo. ICA is the industry body representing handset makers.
The only ones who have been able to cushion the impact of the rupee depreciation are companies like Nokia, which have substantial manufacturing facility in India.
“This once again emphasises the need for local manufacturing capabilities. Depending on imports is not a good strategy and hence the Government is looking to bring in policies that will encourage domestic manufacturers,” said a telecom department official.
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