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Nokia bags first bulk order from Indian cellular operators

After paying customs duty, the handset will cost around Rs 6,500 to the operators who are currently paying about Rs 9,000 for the same model.

The deal is expected to bring down the handset price substantially for subscribers.

T O D A Y

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The agreement was recently closed by a panel of experts appointed by the Cellular Operators Association of India to negotiate with mobile phone manufacturers on behalf of all cellular operators in the country.

As per the agreement, Nokia will supply its '1610 Plus' model to the operators at a net price of $115 per set excluding custom duty. The operators will pay the duty. This means that after paying 53 per cent custom duty, the handset will cost around Rs 6,500 to the operators.

All the handsets procured from Nokia will be used to meet the requirement of all cellular operators for the next three months.

The exercise of choosing a single supplier for bulk quantities will be repeated every three months by the COAI. The quantity of the order will be decided on after considering the estimated requirement of each operator.

The expert panel had shortlisted Nokia and Phillips for supply of their '1610 Plus' and 'Phillips Diga' models. However, the final decision was taken in favour of Nokia.

Industry experts feel that the deal will help the cellular service operators to reduce the subsidy on handsets. The fresh deal will not only work to the advantage of operators but also benefit subscribers because handset prices are likely to fall from 10 to 50 per cent.

Currently, cellular operators are purchasing handsets of the similar category for a minimum of Rs 8,000 to Rs 10,000 per set. After bundling with airtime, they are providing a subsidy of a maximum Rs 6,000 to make it attractive for consumer who gets an effective price of around Rs 2,000 to Rs 4,000.

The cellular operators have decided that they will purchase handset in bulk and negotiate with the manufacturers collectively to fetch a better price. As large quantities will be involved and the product will have the advantage of national presence, the manufacturers are also ready to offer a lower price than the prices currently prevailing in the market.

However, the deal has triggered an intensive debate in the telecom industry over the implications of the exercise.

While operators are encouraged with the result, the move has raised concern among equipment suppliers as paging operators are also planning to place bulk orders for pagers.

- Compiled from the Indian media

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