MobileStore to unveil private label handsets

MUMBAI: The MobileStore (TMS), telecom retail arm of the Essar Group, is close to launching private labelled cell phones to garner a share of the handset market, which is clocking double-digit growth despite slowdown.

While TMS is a venture of the Ruias, the branding will be independent of the Essar Group. "Before end-April, we will launch phones with our private label. We hope to sell half a million units in the first year," TMS CEO Rajiv Agarwal told ET.

The new brand will largely be targeted at the youth segment, with prices ranging between Rs 2,500 and Rs 10,000.
The company's strategy is in tune with the practice in the fiercely competitive mobile retail market. TMS competes with HotSpot of the Spice Group and Chennai-based large-format mobile retail chain Univercell.

HotSpot sells own handsets under the Spice brand, while Univercell is also expected to launch its private label in the next few months. Cellucom, another retail chain, was bought by HotSpot last month.

TMS will import from handset manufacturers mobiles, which will have full quality assurance and IMEI (international mobile equipment identity) numbers. "We feel there is a market with potential for creating a private brand. This is the right time to get started with feature-rich, affordable phones," he said.

TMS, which offers multi-brand handsets, accessories, connections, repairs, besides value-added services, is currently finalising handset models and branding for the new label. These mobiles will offer premium features, including music, camera and multimedia, at a lower cost compared with other branded mobiles.

According to industry estimates, the Indian handset market clocked sales of around 105 million units in 2008. This excludes the huge second hand mobiles sales, which form a sizeable portion of buys in rural areas. Nokia is the market leader with over 70% share in India, with other major players being Sony Ericsson and LG. Vodafone also has its own handset brand in India, apart from other smaller players.

TMS is handling branding internally and has not roped in any agency for the purpose. "We are doing it on our own. Over the years, we have developed a team of marketing, technical and segmentation experts to work on packaging, branding and other things," said Mr Agarwal.

TMS is planning to tie-up with other retailers over a period of time to reach out to more customers. "First, they will be available in our own stores and then in others. We will preview it before taking it out," he said.