The Hindu Business Line : Import of mobile handsets without IMEI number banned

via The Hindu Business Line : Import of mobile handsets without IMEI number banned.

Huge impact on grey market phones.

Our Bureau

New Delhi, June 17 In a move that could signal the end of grey market mobile phones, the Government on Wednesday banned import of all handsets without the International Mobile Equipment Identity (IMEI) number.

IMEI is a unique 15-digit code that identifies a mobile. It prevents the use of stolen handsets for making calls and allows security agencies to track down a specific user. However, a majority of handsets sold in the grey market do not come with the IMEI, which has is of concern for security agencies.

The Government move to ban handsets without the code will hit a number of Chinese and Taiwanese manufacturers that were flooding cheap handsets in the grey market. The move will have no impact on the 25 million cellular users who already have bought a handset without IMEI. The ban is applicable only on new handsets being imported into the country.

The Director-General of Foreign Trade issued the notification on Wednesday imposing the ban with immediate effect.

Welcoming the decision, Mr Pankaj Mohindroo, President, Indian Cellular Association, said, “This is a step in the right direction to throttle handset grey market. However, much more needs to be done to tackle this menace. We are working with the Government in this regard.”

To protect consumers who have already bought handsets without the IMEI number, the Cellular Operators Association of India has tied up with Mobile Standard Alliance of India to set up 1,600 retail outlets across the country to provide the IMEI number on handsets without one. It is estimated that there are 25 million subscribers across the country using handsets without the IMEI number. Concerned over the national security, the Department of Telecom had earlier asked operators to disconnect services to handsets that do not have the IMEI number by April 15. However, the COAI, representing the GSM industry, has developed a software that will provide the unique number to instruments that do not have it.

The solution is being implemented with the approval of the DoT and the security agencies. Subscribers who do not avail themselves of this facility will be disconnected by the operators after June 30.

Related stories at

• http://efytimes.com/efytimes/fullnewsxml.asp?edid=35220
• http://www.ciol.com/technology/mobility/news-reports/india-bans-mobile-handsets-without-imei/18609121163/0/
• http://timesofindia.indiatimes.com/India/Govt-bans-import-of-Chinese-mobiles/articleshow/4668458.cms

Handsets: Maharashtra Organised trade to feel the heat

Akhilesh Shukla on Voice&Data, June 15, 2009 Published June 16, 2009

The proposed hike of VAT to 12.5% on mobile handsets in Maharashtra could hit the organised trade in the Maharastra. Organised trade, which is already hit by higher property rates, shirking margins and high trained employee cost and other operational costs, would loose customer to the unorganised trade.

The decision, on the other hand, will force the unorganised retail industry to switch trade in grey to survive. The sale of grey handsets, especially of higher end model will become more profitable for them and help them to maintain footfalls, as well.

In case the decision came into force, the price of handset costing Rs 20,000 will go by Rs 25,000. Buyers will prefer to buy the phone from grey market, as the difference would be phenomenal.

The organised trade contributes to 13% of the over all handset retail market in India. However, as per number of outlets they occupy 3% of the pie. The handset retail market is slowly and gradually moving towards organised trade. But the state government’s decision will hamper the shift.

Maharastra and Mumbai is one of the biggest handset retail market in the country commanding more than 13% of the market share in the country. As per the current market estimates around 120 mn handsets are sold in the country every year, Of which, 15.6 mn are sold in Maharastra alone.

As per Indian Cellular Association the state government, which is eying a huge revenue from VAT on handset, will loose money as well. ICA says that the state stands to loose at least 473.6 crore in the next three years, if the proposed 12.5 per cent VAT is implemented because of increased sale in the grey market.

The pioneer in mobile handset retail in India The Mobile Store is headquartered in Mumbai and have a strong presence in the region. Besides, HotSpot, another market leader, have a strong presence in the country.

See also: VAT hike on handsets may bring in less tax for state at https://telcobizpedia.wordpress.com/2009/06/08/vat-hike-on-ha…-tax-for-state/

 

Chennai unit top producer for nokia

12 Jun 2009, 0210 hrs IST, Kalyan Parbat, ET Bureau

KOLKATA: Chennai has edged past China as a unit-wise volume producer of Nokia cellphones. In fact, Nokia’s Chennai factory is now the company’s largest cellphone manufacturing facility in the world.

China has two such Nokia factories and Chennai one. But Chennai Nokia has now edged past the larger of the two Chinese factories. While the Finnish cellphone maker is not revealing the annual capacity of its Chennai factory, a senior member of its global planning team said the factory is now indeed its largest manufacturing factory. Unofficial reports suggest Chennai manufactures over 100 million phones every year.

Interestingly, over 70% of Nokia’s 8,000-strong employee pool at the Chennai plant are women, involved in a mix of running productions lines, maintenance and assembly and testing operations.

Nokia operates state-of-the-art mobile phone manufacturing units in India, Finland, China, Korea, Mexico, Brazil, Romania and Hungary. “The Chennai factory is the largest in Nokia’s global ecosystem, although the dynamics in terms of product line vary in each market. But the international markets that we serve out of Chennai have seen the largest growth in volume terms.

At present, Nokia ships GSM phones from the Chennai factory to over 50 markets spanning South East Asia Pacific (including Australia), India, the Middle East and Africa,” said a senior official who did not wish to be named.

When contacted, a Nokia India spokesman said: “As a company policy, we do not share specific capacity numbers of our factories worldwide. All I can confirm at this stage is that our Chennai operation has seen the fastest ever ramp-up across our nine cellphone manufacturing plants. The ramp-up is in terms of the unprecedented growth in cellphone production volumes within a three-year span.”

The latest development is seen as a milestone of sorts for the Finnish cellphone maker and is in sync with its plans to take big strides to grow the Indian handset turf. It also comes at a time when the world’s top cellphone makers, under the ambit of the Indian Cellular Association, are targeting a national production volume of 250 million mobile handsets by calender 2012.

Several presentations have been recently made to the Department of Telecommunications by the manufacturing advisory committee. The larger objective of players like Nokia, Samsung, Motorola and Spice is the creation of an additional 1 lakh jobs during 2009-14 in cellphone manufacturing, assembly, R&D and design.

While Nokia churns out a dazzling mix of GSM phones in India, the first camera phone to be manufactured at the Chennai works was the Nokia 2630 while the first music phone was the Nokia 5130. It does not manufacture CDMA phones in India as yet.

VAT hike on handsets may bring in less tax for state

8 Jun 2009, 0003 hrs IST, Rashmi Pratap, ET Bureau

MUMBAI: The decision of the Maharashtra government to hike VAT (value-added tax) on mobile handsets could actually result in a drop in the state’s VAT collections, says Indian Cellular Association, the industry body for handset manufacturers.

In the state budget, the government last week proposed to increase VAT to 12.5% from 4% on mobile handsets without making the revenue targets from the move public.

According to ICA, the proposed hike in VAT will result in handset sales falling in the organised retail sector in Maharashtra. It is currently at 1.25 crore units annually and could reduce to as low as 8 lakh units. With reduced sales, the estimated VAT collection will also be down from Rs 168 crore annually to Rs 33.5 crore, as per ICA estimates.

Over a three year period, the Maharashtra government will lose around Rs 475 crore in revenue, if it imposes the proposed hike in VAT on mobile phones. The move will trigger increased grey market sales and could expose customers to phones of dubious quality. “A common man, who buys a Rs 1,500 entry-level phone will now have to pay Rs 127 more.

Our experience shows that Rs 30 is the point at which the consumer turns away from the official market to the grey market. If the proposal is implemented, retail outlets will be under pressure,” ICA national president Pankaj Mohindroo told ET. ICA has also written a letter to Maharastra chief minister Ashok Chavan requesting the government to take a closer look at the issue. Importantly, Maharashtra is the only state in the country to have a 12.5% VAT on mobiles — it is 4% in other parts of India.

According to industry estimates, Maharashtra has about 20,000 retailers and over 450 distributors. Over 1.5 lakh people are employed. “If the grey market resurfaces, the employment in the industry will be hurt, Mr Mohindroo said.

Infiniti Retail CEO & MD Ajit Joshi said at a time when mobile phone penetration was increasing, even in rural areas, such a step would not be viewed as positive.

“The government’s aim of taking broadband to rural areas will not be met, if handset prices go up due to the increase in VAT because Indian consumers are extremely price sensitive,” he said. Infiniti, a 100% subsidiary of Tata Sons, owns and runs the Croma chain of consumer electronics and durables. “Also, the government has clubbed mobiles with liquor and cigarettes, which also attract a 12.5% VAT. However, mobile is a tool for connectivity and not a luxury item,” Mr Joshi said.

Rajiv Agarwal, CEO of Essar-owned The MobileStore, said telecom is an essential part of the India growth story and has a direct connection with development. “One state having a differential VAT will create an anomaly. People will buy from neighbouring states and sell here. It is not beneficial for customers, who want warranties,” he said. He added that the decision was not one that augured well for the industry.

See also: Handsets: Maharashtra Organised trade to feel the heat at https://telcobizpedia.wordpress.com/2009/06/15/handsets-mahar…-feel-the-heat/