Beetel Teletech, a Bharti group company and a leader in the fixed-line equipment market for years, has entered the mobile phone space late but aims to be among the top five soon.
But the picture seems to be changing now. Just about eight months after a quiet entry into the mobile handset space, Bharti is now stepping on the gas and yearning to be among the top-three Indian brands and among the top-five mobile phone makers operating out of India. It aims to grab 3-5 per cent of the 150-million-unit-a-year mobile phone market in its first few years of operations. It has already put in place a network of 12,000 retailers across the country, specifically targeting the non-metros and smaller towns and cities, besides first-time buyers, to hawk its products.
| THE MARKET SCENE |
| * A third of India’s 150-million-unit mobile phone market is controlled by Indian manufacturers, and foreign brands, like Nokia, are loosing their market share |
| * Indian mobile manufacturers’s sales have been growing by 40 per cent a year |
| * The total mobile phone market in the country (both Indian and foreign brands) has been growing at 18 per cent a year |
| * There are over 200 Indian brands with market share ranging from zero to 8 per cent |
| THE AMBITION |
| * To grab a 3-5 per cent share of the market |
| * To be among the top-three Indian mobile brands |
| * To be among the top-five mobile brands operating in India |
| * To offer the lowest price for mobiles in the country |
Why did Beetel Teletech change tacks? Here is the answer. Beetel Teletech CEO Vinod Sawhny says: “India sells 150 million mobile handsets a year. Of these, Indian brands account for a third and their sale is increasing at a compunded annual growth rate of 40 per cent. This is compared to the overall market growth of 16 per cent. So you cannot ignore this market.”
Beetel certainly has the disadvantage of entering late a business where there already are more than 200 brands vying for space. And, many Indian brands like Micromax, Karbonn and Spice Mobile have already begun to eat into the space that was earlier dominated by market leader Nokia, whose market share has fallen significantly. The top Indian brands garner between 3 per cent and 8 per cent of the market and are growing. Their USP has been to sell mobile phones high on the features front but low on prices.
Competitors say it will not be so easy for Beetel. “The key in this business is distribution, where Indian phone makers provide long credit lines to retailers and distributors. Bharti’s policies won’t allow Beetel to do so. They want cash upfront. Just advertising and brand recall is not enough,” says the CEO of a leading competing mobile company.
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Sawhny is aware of the challenge. He says, in most global markets, international brands build the market initially and local brands take it to the the next level by penetrating into smaller cities and rural markets, grabbing a large share (in China, for instance, local manufacturers’ share of the market is as high as 80 per cent). That is because they make products for the local consumer and price them in line with their ability to pay.
Beetel’s strategy to play the price game is simple. It wants to provide mobile phones at lower rates and with additional value, says Sawhny. The company’s mobile phones would bear price tags ranging from Rs 1,200 to Rs 6,000 to suit everyone’s pocket. Its second USP would be to leverage its brand, which has been around for over a decade and, being from the Bharti stable, is associated with quality and reliability. This gives it a leg up over rival new brands that have had to build from the bottom through high-decibel advertising.
Sawhny says the company has also ensured that every phone that it brings to the market has some basic features for free, unlike competitors who charge additionally for such features. Every Beetel phone, irrespective of price, comes with a dual-SIM feature and has a high battery life. It also has a camera and FM radio. Also, the company is introducing features that competitors carry only in their higher-end models. For example, lower-end Beetel phones will also be embedded with social media applications.
The company is also looking to leverage Bharti’s large network through bundled offers. Sawhney says about 10 per cent customers have already gone for bundled offers ands the number is set to grow. Beetel is already tied up with Airtel as well as Aircel.
| THE RIVALS |
| Domestic players |
| * Micromax |
| * Karbonn |
| * Lava |
| * Spice |
| * Maxx |
| * Zen |
| * Intex |
Beetel is conscious that it has to maintain quality. Sawhney, therefore, has to put together an integrated design and manufacturing strategy. The phones are manufactured in China, and designed at design houses meant to chisel them out in line with the needs of Indian consumers. Bharti’s quality engineers at the factories check each product before it is shipped out.
Even as it is not going to be easy to make a dent in established players’ market immediately, Beetel aims to replicate its success in the fixed-line equipment market and makes it just as big.