1

ACKNOWLEDGEMENT


l Lake greaL pleasure Lo Lhank and acknowledge Lhe help and lnsplraLlon provlded by my pro[ecL
gulde prof Amar 1lgga l am Lhankful Lo hlm for provldlng me a greaL opporLunlLy for my markeLlng
pro[ecL Pls guldance aL every sLage of Lhe pro[ecL enabled me Lo successfully compleLed Lhls pro[ecL
whlch oLherwlse noL have been posslble wlLhouL hls consLanL encouragemenL and moLlvaLlon
l would llke Lo Lhank all Lhe faculLy members of kAVILkS INS1I1U1L CI SCCIAL SLkVICL for
provldlng Lhelr supporL as well as encouragemenL for compleLlon of Lhe pro[ecL l would also llke Lo
Lhank my frlends for helplng Lo complle my pro[ecL
1PAnk?Cu








CONTENTS :

1A8LL CI CCN1LN1S
n|story and growth of mob||e phone |ndustry |n Ind|a
04
r|c|ng Strateg|es of mob||e phone |ndustry
O Penetrotion Pricinq
O redatory r|c|ng
O Perceived vo/ue Pricinq
O Io/ue Pricinq
O Product form pricinq
O Spec|a| Lvent r|c|ng
O LowInterest f|nanc|ng

0S
Iuture of Mob||e Industry
09
conc|us|on
10
b|b||ography
11




History and growth of mobile phone industry in
India:
1he real LransformaLlon came ln Lhe scenarlo of lndlan Lelecom lndusLry afLer announcemenL of
naLlonal Lelecom pollcy ln 1994 1he moblle servlces were commerclally launched ln lndla ln AugusL
1993 ln Lhe lnlLlal 36 years Lhe average monLhly subscrlbers addlLlons were around 003 Lo 01
mllllon only and Lhe LoLal moblle subscrlbers base ln uecember 00 sLood aL 103 mllllons
Powever afLer Lhe number of proacLlve lnlLlaLlves Laken by regulaLor and llcensor Lhe monLhly
moblle subscrlber addlLlons lncreased Lo around mllllon per monLh ln Lhe year 0004 and 004
03 ln Lhe lasL few years Lhere has been a huge exponenLlal growLh wlLh addlLlon of abouL 10 Lo 13
mllllon subscrlbers per monLh Lo cusLomer base
ln Lhe lnlLlal days of moblle phone ln lndla ln mld 1990rs Lhe grey markeL accounLed for 80 per cenL
of Lhe moblle phone sales due Lo a huge prlce dlfferenLlal beLween Lhe legally lmporLed and Lhe grey
markeL phones
AfLer Lhe lnlLlal domlnance of nokla from 1990rs Llll 00 a change occurred ln lndlan markeL hen
CuMA Lechnology was launched ln Lhe year 00 AL Lhls polnL Lhe korean brands namely Samsung
and LC esLabllshed Lhemselves afLer Lhey Lled up wlLh CuMA operaLor 8ellance lnfocomm 1hls was
a breakLhrough ln lndla's moblle phone lndusLry slnce people were able Lo geL moblle phones wlLh
8ellance connecLlon only for a lnlLlal cosL of abouL 8s 300/ 1hls opened up a mass markeL for
moblle manufacLurers ln lndla ln Lhe lasL few years lndla has wlLnessed a revoluLlon ln moblle
phone markeL wlLh abouL 8 Lo 10 mllllon subscrlbers belng added Lo Lhe cusLomer base each monLh
1he ma[or reasons for Lhls boom have been

1 lalllng Larlff raLes of Lelecom servlce provlders
lall ln Lhe prlces of moblle handseLs
lncrease ln Lhe reach of servlce provlders coverlng every nook and corner of Lhe counLry

4

!ricing Strategies of mobile phone industry:


1Penetrotion Pricinq
1hls prlclng sLraLegy ls followed by companles wlLh Lhe lnLenLlon Lo maxlmlze Lhelr markeL
share 1hey belleve LhaL a hlgher sales volume wlll lead Lo lower unlL cosLs hlgher longrun
proflL
Lxamp|e Ch|na Mob||e hones |n Ind|a
1hls ls one of Lhe fasLesL growlng lndusLrles ln lndla Chlna moblle phones are cheap and offer Lhe
same feaLures as a expenslve moblle from some oLher well known manufacLurers
A few samples of Chlnese moblles are shown above Cnly problem LhaL exlsL for Lhe Chlnese moblle
phones ls LhaL consumer generally have a low quallLy percepLlon assoclaLed wlLh Lhem and hencedo
noL LrusL Lhelr quallLy Powever Lhey are well sulLed Lo people who wanL Lo en[oy feaLures of a hlgh
end moblle wlLhouL havlng a budgeL for Lhe same


redatory r|c|ng
1hls prlclng sLraLegy ls followed wlLh Lhe lnLenLlon Lo wlpe ouL Lhe compeLlLlon Lxamp|e In the year
003 LG and Samsung a|ong w|th ke||ance came up w|th ks S00] moblle scheme where boLh
handseLs along wlLh connecLlons were avallable for 8s 300/ 1hls was someLhlng whlch
revoluLlonlzed Lhe moblle phone and Lelecom lndusLry

3 Perceived vo/ue Pricinq
ln Lhls case Lhe prlclng ls done based on Lhe cusLomers percepLlon abouL Lhe company and lLs
producL ercelved value ls made up of several elemenLs such as buyer's lmage of producL
performance Lhe channel dellverables warranLy quallLy and even sofLer aLLrlbuLes such as
suppller's repuLaLlon
xomp/e A good examp|e for th|s k|nd of pr|c|ng |s App|e |hones 1hey are offered |n pr|ce range
of ks 31000] to ks 4S00]
1helr prlce ls seL based on lmage of brand apple cusLomer afflnlLy Lowards lL Comparable moblles
phones from oLher manufacLurers llke Sony Lrlcson nokla are offered aL relaLlvely cheaper prlce
3

Ior examp|e comparab|e N ser|es mob||es from Nok|a are offered at pr|ces be|ow ks 30000]
(Lxcept for Nok|a N9 Nok|a8800 Carbon) Also SCn? L8lCSSCn SaLlo ls offered for 8s
1000/ all oLher Sony brands are avallable for prlces below lL Apple can seL hlgher prlces slnce lL
feels LhaL lLs cusLomers wlll be ready Lo pay for lL based on lLs percelved value4 Io/ue
Pricinq
1hls ls prlclng sLraLegy ln whlch a company wlns loyal cusLomers by charglng a falrly low prlce for a
hlgh quallLy offerlng xomp/e Nok|a L 63 Mob||e 1h|s mob||e |s pr|ced at ks 1160 S
Product form pricinq
ulfferenL verslons of Lhe same producL are prlced dlfferenLly
Lxamp|es Nok|aS000 |s pr|ced at ks 4300] Whereas Nok|a710CSupernova |s pr|ced at ks
4800] offers almosL Lhe same feaLures 1he reason for dlfference ln prlclng ls due Lo Lhe sleek
sLrucLure of nokla10C
6 Spec|a| Lvent r|c|ng
ln Lhls case speclal prlces are offered durlng speclal occaslons llke fesLlvals Lo lncrease Lhe sales
xomp/e Last D|wa|| (September 009) Samsung offered d|scounts on Samsung Cmn|a mob||e
phone 1he|r market pr|ce at that t|me was ks 33990] whereas the|r d|scounted pr|ce for D|wa||
was ks ks 31990]
7 LowInterest f|nanc|ng
Company can offer low lnLeresL flnanclng Lo cusLomer 1hls wlll reduce Lhe burden of lnlLlal cosL Lo
Lhe cusLomer
xomp/e In 009 Nok|a p||oted a scheme |n two Ind|an states where |t so|d handsets on a week|y
|nsta|ment of 100 rupees (5) over S weeks per|od
1hls ls done Lo make Lhe cusLomer belleve LhaL producL ls prlced cheaply or some cases [usL break
Lhe prlce barrler LhaL cusLomer has ln hls mlnd llke prlce aL prlce 8s 999/ whlch ls prlced [usL below
8s 1000/
f
MC1CUVA W1S6 pr|ces at ks 109
Samsung Guru ks 999]

6

uture of Mobile Industry:

uemand Among oor larmers keeps an lndusLry Crowlng as CLher SecLors of Lhe Lconomy Are
!olLed 8ural cusLomers have been hungry for moblle phones for a long Llme so demand wlll remaln
unaffecLed by Lhe global [lLLers sald S Shukla chlef execuLlve offlcer of Lhe moblle buslness aL
8ellance CommunlcaLlons lndla LLd lndlas secondlargesL cellular company by number of
subscrlbers LconomlsLs have slashed lndlan economlc growLh forecasLs for Lhls year and Lhe sLock
markeL ls ln Lhe doldrums 8uL cell phone companles are slgnlng mllllons of new subscrlbers a
monLh maklng lndla Lhe fasLesL growlng mobllephone markeL ln Lhe world 1here ls no slgn of a
slowdown yeL flgures Lo be released laLer Lhls monLh are expecLed Lo show LhaL new subscrlpLlons
ln !anuary reached a record 11 mllllon
1he demand for cell phones ls comlng malnly from rural consumers who Lyplcally earn less Lhan
$1000 a year 1hese buyers havenL been affecLed by plunglng sLock and realesLaLe prlces or LlghLer
bank lendlng slnce Lhey Lyplcally donL own land and donL borrow A large ma[orlLy of Lhem donL
have access Lo regular landllne phone neLworks Lhere are only abouL 40 mllllon landllne
subscrlbers ln lndla so once cellular coverage comes Lo Lhelr Lowns or vlllages Lhey scramble Lo geL
Lhelr flrsL phones ln Lhe vlllage of karanehalll a clusLer of slmple homes around an lnLersecLlon of
Lwo dlrL roads abouL 40 mlles from lndlas hlghLech caplLal of 8angalore larmer k1 Srlnlvasa
doesnL have a LolleL for hls home or a LracLor for hls fleld 8uL when a red and whlLe cellular Lower
sprouLed ln hls vlllage he splurged on a cell phone Whlle Lhe way hls famlly Lhreshes rlce crushlng
lL wlLh a masslve sLone roller hasnL changed for generaLlons hls phone has changed Lhe way he
farms Pe uses lL Lo declde when Lo planL and harvesL by calllng oLher farmers Lo geL Lhe besL prlces
for hls rlce coconuLs and [asmlne by calllng wholesalers and Lo save hours of Llme walLlng on Lhe
road for dellverles and plckups LhaL rarely come on Llme
Llfe ls much beLLer wlLh Lhe cell phone he sald from hls rlce paddy ln Lhe shadow of Lhe new
Lower l brlng lL wlLh me Lo Lhe flelds and anyone can reach me here
Llke mosL rural users Mr Srlnlvasa uses hls phone Lo make volce calls he doesnL know how Lo LexL
message or Lo download emalls Cn average rural lndlans use Lhelr phones around 83 hours a
monLh up 10 over Lhe pasL year



Conclusion:

AbouL 0 percenL of lndlas near 1 bllllon lnhablLanLs llve ln rural communlLles

- 8ural LeledenslLy was a mere 16 percenL
- 8ural wlre llne connecLlons LoLalled 1068 mllllon aL Lhe end of uecember down by 46
percenL from 1093 mllllon aL Lhe end of SepLember 009
- 1he rural wlreless subscrlber base hlL 913 mllllon aL Lhe end of Lhe year up 8 percenL
from 9098 mllllon aL Lhe end of SepLember
- ueparLmenL of 1elecom and 8SnL have slgned an agreemenL Lo provlde 861000
connecLlons Lo lndlvldual users and governmenL lnsLlLuLlons Lhrough rural and remoLe
exchanges by 014
- 1o promoLe rural rollouL by Lhe prlvaLe operaLors Lhe lndlan governmenL lmposed
unlversal Servlce CbllgaLlons (uSC) on Lhe counLrys operaLors Lo bulld a fund LhaL can
flnance Lhe rollouL of servlces ln areas where Lhere lsnL an obvlous or presslng buslness
case Lo do so
- 1he flrsL phase of moblle lnfrasLrucLure deploymenL under Lhe uSC fund scheme
commlssloned slx dlfferenL servlce provlders Lo deploy 81 Lowers
- Powever by Lhe end of CcLober 009 only 194 Lowers had been lnsLalled 1he second
phase compleLe wlLh a Lender for an addlLlonal 11049 slLes has yeL Lo be sLarLed
- 1he phased rollouLs assoclaLed wlLh Lhe uSC scheme requlre an addlLlonal 4083 moblle
Lowers Lo be erecLed
- Add Lhls Lo Lhe number of Lowers requlred for Lhe flve new C neLworks addlLlonal
coverage and capaclLy for exlsLlng operaLors and Lhe lnLroducLlon of C neLworks and
Lhere ls a huge demand for new cell slLes rlghL across Lhe counLry


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ibliography:

O hLLp//enwlklpedlaorg/wlkl/CommunlcaLlons_ln_lndla
O hLLp//wwwlcmrlndlaorg/casesLudles/caLalogue/8uslness0SLraLegy/8S1814hLm
O wwwvlLalanalyLlcsln
O hLLp//wwwfonearenacom/moblle_phone_prlcellsLhLml
O wwwmoblleprlceslndlacom
O hLLp//wwwmoblleprlceslndlacom/nokla_Moblle_honesphp
O hLLp//webebscohosLcom
O hLLp//wwwlndlacellularcom/MobllerlceshLm
O hLLp//proquesLumlcom/pqdweb?lndex8dld16381441SrchMode1sldlmL
vlnsL8Cuv1ypeCu8C109vnameCu1S164369cllenLld13690


9