Sub-Rs 4,000 3G handsets by year-end

The launch of third-generation or 3G mobile services, slated for October-November, is expected to transform the mid- and higher-end mobile phone segments, according to handset makers.

They say quality 3G phones would be available in the Rs 3,500-4,000 range by the year-end, a third lower than the price now.

While mainstream consumers now obsess over number of megapixels on the camera, built-in memory, FM radio etc, launch of 3G services will bring a new host of buzzwords like ‘dual camera’, HSPA (short for high-speed packet access, which supports 10 to 30 times the speed of normal 3G) and ultra-large screens to the common man’s mobile must-haves.

“Our plan is to bring video calling and HSPA within the Rs 3,500 price bracket by the end of the year,” says Vikas Jain, one of the co-founders of Micromax, the company which has among the most attractively priced 3G phones in India today.

The 3G handset market can be quite confusing for the uninitiated. At around Rs 4,100, the Nokia 2730 is the cheapest 3G phone in the market now.

However, the phone does not have a front camera to allow you to make video calls, supposedly the killer application in 3G.

The cheapest 3G phone with a front camera for video-calling is LG’s GU285, with a price tag of around Rs 4,700. Both phones have 2-inch displays.

However, though they are technically 3G phones, they use the first and less efficient version of 3G, whose speeds are only around 2-3 times higher than that of most 2G phones.

The real hi-speed phones, with HSPA come at much higher prices. Besides, to take advantage of the multimedia aspects of 3G, one needs displays in the range of 2.4 to 3.7 inches. Whether it is Nokia, Samsung or LG, HSPA phones with dual cameras cost at least around Rs 7,000.

The Indian and Chinese brands, however, offer slightly cheaper versions. Micromax’s 2.4-inch phone with HSPA starts is priced at Rs 5,500 while Huawei’s 2.8-inch phone, the U7510, comes for Rs 6,500, including around Rs 400 worth of freebies from BSNL.

“Basically, the consumer segment is not restricted at all and 3G can be a call for anyone... A customer whose requirement is TV viewing or movies, can opt for a low price phone,” says Sudhin Mathur, LG India’s head for mobiles.

However, a user will consume several times more spectrum on a ‘normal’ 3G phone compared to an HSPA phone. This is likely to be frowned upon or even counter-acted by network operators.

“The whole point of 3G is to decongest the overloaded networks,” says Jasmeet Gandhi of Nokia’s handset division, pointing out that 3G is supposed to allow operators to support many more customers at a higher quality than 2G as it is 3-5 times more efficient.

“As such, operators are likely to push for consumers to choose HSPA rather than simple 3G phones. However, I am not sure if they will actually disconnect non-HSPA handsets from their 3G networks,” he says.

Both Gandhi and Micromax’s Jain believe prices of HSPA phones are ready to crash. “To a large extent, it will depend on our ongoing consultations with operators,” says Gandhi.

He points out that if the operators plan to deploy extensive 3G networks across the country, instead of confining themselves to the main urban centres, it opens up a volume-based opportunity. “If they do, then there is a chance for us to bring HSPA technology to the price segment where we currently have [normal] 3G, because the volumes will be big enough to support a low price,” he says.

Besides Micromax and Nokia, the Korean brands too are planning a slew of 3G launches in the coming months. LG, which has six 3G models, will launch another 10 this year, while Samsung, which has 14 current models, will launch another half a dozen this year.

Samsung says among the prospective line-up will be handsets that will be even more “competitively” priced than its existing 3G phones, which have a starting price of Rs 6,600.

“Currently, 3G handsets contribute around 5% of the total handsets sold by us and it should easily double within a year,” Samsung’s director for mobile and IT, Ranjit Yadav, says.