More cheap cellphones coming soon

It’s official now. Along side the Nokias, Samsungs, Motorolas and Sony Ericssons there’ll be a new mass cellphone brand in India — Vodafone! Vodafone Essar, which will spend nearly Rs 250 crore on a high-profile brand transition from Hutch to Vodafone being unveiled on Thursday, is poised to launch cheap cellphones in India under the Vodafone brand. It will also launch co-branded handsets sourced from major global vendors.

“On the heels of the brand change from Hutch to Vodafone, Vodafone Essar will launch an array of low-cost cellular handsets in India which will be directly marketed under the Vodafone brand or co-branded with select overseas handset makers,” a Vodafone Essar director told ET on condition of anonymity. “The objective is to leverage Vodafone Group’s global scale in bringing millions of low-cost handsets from across the world into India and use Vodafone Essar’s famed cellphone distribution reach to maximise sales,” he added.

With Reliance Communications (RCOM) recently launching ultra budget handsets with prices starting at Rs 777, the industry buzz is that Vodafone would lower the entry barrier to an unbelievable Rs 666. There’s also speculation that Vodafone may follow the pricing model of Rs 666, Rs 777, Rs 888 and Rs 999 for its ultra-cheap handsets.

The Vodafone director refused to confirm this: “I cannot share pricing details but there will be no discounts or subsidised handset offers. Instead, Vodafone Essar may come up with innovative handset-bundled schemes for its 35 million consumers.” Company sources also said that the bundled handsets will primarily be distributed through Vodafone Essar’s four lakh-odd distribution outlets. “Vodafone Essar is also entering collaborative arrangements with some of the top vendors to achieve unprecedented sales,” a top company official told ET.

While CDMA players like RCOM and Tata Teleservices have adopted handset-driven expansion strategies to drive up subscriber base, this is the first time that a GSM player is venturing into this space on a pan-India level.
China’s ZTE, which is looking to set up a cellphone manufacturing unit in India, is expected to provide many Vodafone handsets in India. Early this year, Vodafone inked a global low-cost handset procurement deal with ZTE.

ZTE global vice-president (handset systems) He Shiyou told ET that as per the deal, Vodafone would offer ZTE’s handsets to its subscribers in India. “ZTE hopes to ship over 10 million of these to India. Though, we ship high-end phones to the West, our plan for India revolves around low-cost phones, which we offer in collaboration with operators there,” Mr Shiyou added.

The company will unveil the Vodafone brand on Thursday in one of the biggest brand transition exercises in the recent times. According to PTI, Vodafone will keep in-tact its predecessor’s assurance of following customers wher-ever they go, but will replace Hutch’s ‘Wherever you go our network follows’ catchline with ‘Make the most of now’.