Indian Mobile Devices Market to reach 350 million a year by 2020

Joint study by industry association FICCI and Ernst & Young predicted Indian mobile devices market to reach 350 million a year by 2020. The handset companies currently sell about 150 million mobile phones annually in India.
While smart phones will lead the Indian growth story, people will spend more on buying cell phones as the average selling price of handsets is likely to go up to Rs 2950 by 2020 compared to Rs 2300 in 2010.

According to this study, rural market will provide the next phase of growth for handset players. The study also stated that about 500 million handsets will be manufactured in India by 2020. However, this will be possible only if the country were to create a manufacturing ecosystem to produce handsets.

India is the world's second-largest telecom market after China, with the total wireless subscriber base crossing 850 million at the end of June, 2011.

The study stated that In India, handsets are categorised as high, medium, low, and ultra low cost ASP devices. The medium ASP segment is likely to be the fastest growing segment in terms of volume.

The estimation that number of 3G subscribers is expected to cross 300 million by 2020 fuelled the growth of 3G-enabled handsets. A favourable policy and regulatory initiative conducive for handset manufacturing in India is expected to drive sustainable growth in this segment.

The study recommended that there is need to set up handset manufacturing cluster parks that would enable a sustainable ecosystem for the manufacture of mobile handsets in the country. Affordability of feature-rich handsets is also expected to be a key enabler of handset adoption.

Recommendations

The study recommended that detailed component supply roadmap needs to be developed by starting to manufacture certain parts such as chip-sets, keyboard, plastic elements and battery.

The study also suggested creation of sizeable export promotion fund by the government for the telecom equipment and services export and handset exports from India may be included in bilateral trade agreements with emerging markets in regions such as South Asia, Africa, Latin America, Russia and Eastern Europe.