Booming India hides risks for newcomer

Pantech is the latest Korean brand to enter the Indian cellular handset marketplace. In March, it launched its series of feature-laden GSM handsets; the G300 for the cosmopolitan woman and the G500 for the 'successful man'. Pantech also teamed up with First Mobile India, a leading mobile phone distributor, for marketing and promotional support. The timing of Pantech's entry into India is interesting. On the one hand it comes at a time when the booming market is poised for the next big leap. Despite heady growth prospects, Pantech cannot afford to ignore brand building. Very few have heard of Pantech, unlike LG and Samsung, which already have strong white goods brands in India. Pantech is also going after the top end, where brands such as Sony Ericsson and Nokia rule. India, according to industry estimates, is set to emerge as the fourth-largest handset market in the world. It is expected to add 24 million subscribers this year, implying that the mobile market has finally come into its own. But the rash of new launches and models is creating short-term challenges, especially for newcomers: prices are falling. A large proportion of the growth in the market has come from the pre-paid segment, which has expanded the mobile net to include lower income consumers. And the CDMA segment, powered by the launch of Reliance India Mobile's services, which are priced far lower than any competing operators, is skewing the market towards budget consumers. Nokia has responded with models for cost conscious consumers. Developments in the handset market will also depend on the telcos. Though a lot of advertising highlights services such as photo-messaging, few believe these areas will generate huge business. Pantech's models boast a range of features, like digital camera, but even known brands such as Philips, Siemens and Alcatel, which are nevertheless struggling as they haven't been able to run sustained advertising, or tie up with telcos. And Pantech will have to make sure it's differentiated from new entrants such as Sagem, Bird and BenQ.