An Indian company is trying to make a splash in the feature phone space, the new telecom battleground for consumers.
Gurgaon-based SG Corporate Mobility Pvt Ltd has been selling mobile phones under the Detel brand, starting at Rs 299. It claims to have sold around 600,000 devices across price points so far, after entering the feature phone market in 2016.
Run by Yogesh Bhatia, who used to be a distributor of mobile phones, Detel said it aims to connect those who could not afford a phone but dream about owning one. “With a vision of connecting the 400 million people, we took the initiative to bring such phones to people who could not afford a phone. Our first product, Detel D1, hit the market in 2017 priced at Rs 299. It has seen tremendous response,” Bhatia told Business Standard.
The company launched an upgraded version of the Detel D1, which would now cost Rs 399. The upper price range of Detel mobile phones is Rs 899.
On whether the company was making money by selling phones for Rs 299, Bhatia said they were at break-even point. But, the company makes reasonable margins on other products, he said.
Detel was also looking to invest in a manufacturing facility here. As of now, the manufacturing is outsourced. Bhatia said he was in advanced talks with various government authorities to set up a plant.
“We are planning to invest $50-70 million in our manufacturing facility and the research & development unit,” he added. “We are also expanding our product portfolio and planning to launch smart LED TVs and accessories.”
The company had recently launched an upgraded version of its Detel D1. Bhatia said he wanted to not make just second-generation (2G) feature phones but also make fourth-generation (4G) feature phones by 2018.
Experts have bet big on India’s feature phone market. Analysts say the 4G feature phone segment is a 200-million-unit opportunity over five years. Hundreds of millions of feature phone users are likely to upgrade to 4G devices soon.
According to Counterpoint Research, the feature phone market grew 12 per cent in 2017 and over 400 million of these would be sold in India in the next three years. “Users in the rural area are hesitant to upgrade smartphones due to the touch-form factor and lack of vernacular support. Introduction of 4G feature phones will encourage users to upgrade their phones. With a longer shelf life, these devices are likely to remain relevant for the next four to five years,” said a research analyst at Counterpoint Research.
While this could be an opportunity for Detel, Bhatia might have to battle a negative perception about cheap phones.
In 2016, a company called Ringing Bells had come out with Freedom 251, touted as the world’s cheapest smartphone at Rs 251. Critics had said the company would not be able to make money. Ringing Bells took online orders for millions of phones but provided only a few thousand devices.
Bhatia, however, said Freedom 251 was possibly the most-hyped product in recent years and it turned out to be a disappointment as the company failed to deliver on its promise. “We are here to change the perception. We are trying to bring communication services in the most cost-effective manner, with a clear target to address the untapped section, who still feels that owning a phone is a luxury.”