Cell change’s new fad among Indians

Cell change’s new fad among Indians

Author | Source: The Economic Times | Friday, May 19,2006 6:49 AM

Cell change’s new fad among Indians

Two Saturdays in a row is a long time. It's time to change the mobile phone for this extremely fashion-conscious segment of mobile subscribers who like to go for a new phone every 15 days.

This segment, including mainly the youth, the rich or the Page Three types, comprises about 1-2% of the mobile subscriber base, so far (parents of young brats can heave a sigh of relief).

While the 15-day replacement cycle is a trend among those who believe the mobile phone is a fashion accessory, the fact is India's mobile users are changing their handsets faster than ever before. Looks and price are the crucial deciding factors.

Mobile users are changing their handsets very fast, thanks to the plethora of feature-rich cellphones available in the market and the falling prices of these handsets. The replacement market for mobile phones is growing at a fast pace, driving handset demand.

According to industry estimates, around 18% to 20% of users are changing their mobile phones every 5 to 6 months as against about a year earlier. However, about 60-70% of the users will make do with the same model for about a year or a year and a half.

“In metros, people replace their phones in 6 to 12 months while the national average would be around 18 months. This is because of the availability of newer gadgets, which support features beyond the conventional voice services,” says Sudhin Mathur, general manager, Sony Ericsson India.

The replacement (when existing phone users change or replace their phones) market has been growing and accounts for about 20-25% of the total handset sales, up from 10% a couple of years ago. With the mobile user base reaching around 97m by April-end, the replacement market will be over 19m handsets (around 20%).

Given that about 4m customers are joining the ranks of mobile users each month, it is not surprising that handset makers are falling over each other to woo these customers with newer handsets.

In order to keep pace with the ever growing demand for feature-rich handsets, manufacturers like Nokia, LG, Sony Ericsson and Samsung are rolling out new models almost every quarter. The past couple of months have seen the launch of about 20 models by various phone vendors.

“After familiarising themselves with mobiles, first time users want to upgrade from black and white (monochrome) to colour mobiles. Handsets now get 'old' faster than before and people want to replace them with newer models,” says Praveen Valecha, LG Electronics Group Head (Mobile Phones).

Users' expectations are increasing and with cellphone being a constant companion, people like to sport the latest handset in the market. The phone is now a style icon.

“As the phone becomes a status symbol, people from certain strata of society like to change their phones within a matter of weeks,'' says Shubhra Zaveri, director, Phone Shop, a dealer of mobile phones.

The Indian market is also seeing the entry of new phone vendors. Meridian Mobile recently rolled out its `Fly' brand of cellphones in India. “It is important to have fully loaded phones as the replacement market gets stronger in India,” said Rajiv Khanna, CEO (India operations), Meridian Mobile.

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