Expert View

December 27, 2004
GPRS segment very small in India: Ezze Mobile

Geetanjali Wadhwa & Pradeep Chakraborty

KOREA AND NEW DELHI -- Since the year 2000, Ezze Mobile has grown into a leading manufacturer of mobile phones in Korea. The majority of its sales are on an OEM basis in countries such as China, Dubai, Italy, Malaysia, Russia, Taiwan, Thailand, USA, etc.

Besides supplying finished products, Ezze also focuses on providing total solutions to customers such as enhanced GSM cellular products (mid-to-high end), fully automated production system, MIS of component management and an integrated production management system. Convergence*plus met I.S. Sung, general manager - India operations, Ezze Mobile Tech Inc., to find out about the company's activities and its plans for India. Excerpts from an interview:

Convergence*plus: Please update us on Ezze Mobile's activities.

I.S. Sung: Ezze is one of the top five GSM mobile phone manufacturing companies in Korea. Currently we sell our phones [mostly on an OEM basis] in countries such as China, Dubai, Italy Malaysia, Russia, Taiwan, Thailand, USA, and other European countries. From this year Ezze has been concentrating on the Indian mobile market. To realize our goals for the India market, Ezze Mobile signed an agreement with BPL Telecom on 28 May 2004. This agreement is for the OEM based supply of GSM mobile phones to BPL by Ezze. BPL launched the BPL brand mobiles officially on 24 November 2004.

As of now, BPL has introduced five of our models into the market. Very soon we will provide BPL with more models that have cutting-edge features and designs. Till now we have shipped around 20,000 handsets to BPL, which have been launched into the market.

CP: How has your performance been over the years?

ISS: We sold 1.5 million phones globally in 2002 and 2.5 million phones last year. Our sales amounted to US$ 250 million in 2003, and are estimated to reach US$ 300 million this year. Our manufacturing capacity is 600,000 handsets per month.

CP: What is your estimate of the Indian mobile market, and what targets have you set for yourself?

ISS: The Indian GSM mobile market is doubling every year. This year, the additional mobile subscribers will number around 26 million. In 2005, this figure will be around 40 million, with a large demand for new handsets in the coming year. So there is huge potential in this market with almost 100 percent growth. As a newcomer, we are targeting a modest percentage (10-15K handsets per month) share for 2005. In the next three to four years, our plan will be to push BPL among the top 5 mobile players.

CP: You have recently selected BPL Mobile as a distribution partner. What are the terms of the agreement between the firms?

ISS: Ezze Mobile and BPL Telecom recently signed an agreement. This is for the OEM based supply of GSM mobile phones to BPL by Ezze. So, BPL will sell our mobiles under the BPL brand name. We have done all the necessary customization for the BPL brand according to the needs of the Indian market. In the near future, BPL is planning to manufacture mobile phones in India. So, we can supply our phones in an SKD and CKD basis to them as well. Some technical collaboration is also possible.

CP: How do you estimate the GPRS handset segment in India? What are the models that have been launched or planned for launch?

ISS: The GPRS handset segment in India is still a very small one in comparison to other Asian countries. Over 70 percent of the market is for low-end phones. The GPRS market segment is growing slowly.
We have provided five models to BPL, the details of which are as follows:

• Slim 0288: Low-end model -- monochrome, very slim design.
• Elegant 0378: Mid-end model -- 65K color screen, folder phone.
• Aristo-FD 8820: Mid-end model -- GPRS folder phone with 65K color screen.
• Aristo-FC 0657: High-end model -- GPRS folder phone with camera, 65K color screen, and
• Aristo-RC 8352: High-end model -- GPRS folder phone with camera, 65K color screen.

Three of these models have a GPRS feature and two have cameras.
Our models cater mostly to the mid and high-end segments. In future, we will launch our slide phone with a camera. We also have two to three models with MP3 players, which we plan to introduce after some time. Besides, our R&D facility continuously works on developing new models with more features. Hence, we will continuously add more models in the future.

CP: According to you, Ezze's phone prices are lower than other brands because of the ease of sourcing key components. How low are the prices across all three: low, mid and high-end segments?

ISS: Our overheads are less than other major manufacturing companies as our technicians are well trained and use highly efficient technology to design the phones. It is easy to source the key components economically as well. The price of our low-end phone, the Slim 0288, is on par with other brands. However, our mid and high-end phones are priced around 20 percent lower than the other branded phones with a folding feature.

CP: Apart from lower prices, what other USPs do your handset models have?

ISS: Other than lower prices, our phones have better designs and looks, and are slimmer and lighter.

CP: Please elaborate on your design activities. Are you outsourcing from India?

ISS: Our manufacturing and design activities are based in Korea. Other than the manufacturing plant in Korea, we have our own R&D center with around 70 engineers working to develop better designs and the latest feature phone models. Right now, two to three models are in the development stage. They will have features such as an MP3 player, multimedia, etc. We are developing these models for the high-end segment. Right now, we are not outsourcing any parts etc., from India.

CP: What other strategies do you plan to adopt for the Indian market? Do you plan to open a full-fledged marketing office?

ISS: One of the strategic moves that we have taken for the Indian market is to partner BPL Telecom. The BPL brand has a strong presence in India with very good infrastructure and sales channels for selling our phones. We also have an office in New Delhi, which looks after the co-ordination and marketing efforts in India. In the near future, we will be co-marketing with BPL to push our phones. If available, we would also like to look for another strong partner for our high-end phones.

Contact:
Ezze Mobile
www.ezzemobile.com