Indian Mobile Companies to Enter African Markets

Micromax, Lava, Spice, Zen etc are all now going fishing in African waters!

The native mobile manufacturers who have tasted no mean success by grabbibg about 20% of the mobile phone market in India despite being pitted against global giants like Nokia, Motorola, and Samsung are now raring to go scouting for sustained success by extending their reach across the seas. Having tasted success back home, these handset makers smell opportunities and success in the African countries. It is estimated that the African market can lap up at least 1,00,000 mobiles a month.

The success of brands like Micromax is marked by an astute assessment of the requirements of Indian users coupled with innovative products and prices that do not burn a gaping hole in one's pocket. Strong distribution networks and widespread, easy-to-access servicing facilites have also played a significant role in the success of the native brands in the domestic market.

These manufacturers now hope to repeat the success story across Africa - and, perhaps, in future, in other continents too.

The very conditions which made the domestic success story possible are now prevailing in the African continent too.

Improving economic conditions leading to greater and greater purchasing power, falling mobile tariffs, increasing acceptance of handsets not tied up to any particular cellular network operator are all factors favouring a rapid, sustained growth of mobile phone markets in Africa. The African market further resembles the Indian mobile market in that the number of landlines is less than that of cell phones and the spread of landlines is not substantial. In Africa, cell phones account for more than 90% of all telephones and the mobile penetration is at about 50%.

Confidential but well-placed sources suggest that Micromax, which started selling its cellphones in Brazil last month, is all set to enter the Nigerian market, which has the second largest number of potential customers, in June, 2011.

The sales have not been very high for Zen Mobile which has been selling handsets in Nigeria. Zen has gone for a joint venture with a marketing and distribution company in Nigeria and has sold about 20,000 to 30,000 handsets in the price range of $25-$50.

Deepesh Gupta, Director, Zen Mobile said "When people want to upgrade, there is not much choice:¦ they want music, multimedia, better screen, better sound at a better price." Indian companies can tap the growing market for mid-range smartphones and become major players in the replacement market, according to Gupta.

Dilip Modi, MD, Spice Mobility, which has been selling value-added services to African cellular service operators for over a year now, says "There are MNCs and Chinese players (in Africa) leaving a huge gap for us to fill."