Price war, network coverage to power 5G handset sale in India
A price-war seems to be in the offing with brands such as Xiaomi, Vivo, Samsung and Oppo implementing strategies to flood the India market with 5G phones
Despite initially remaining lukewarm, Indians are warming up to 5G technology with 70% of the consumers expected to own a 5G-enabled in two years, a trend that is supposed to be powered by declining prices and pan-India network coverage, The Economic Times reported quoting industry experts.
A price-war seems to be in the offing with brands such as Xiaomi, Vivo, Samsung and Oppo implementing strategies to flood the India market with 5G phones. The retailers have unveiled an array of price cuts and offers to get rid of 4G smartphone stocks to make way for their 5G handsets.
The handset manufacturers are busy raising their production capacities to dovetail marketing and production strategy. According to estimate by Industry body India Cellular & Electronics Association (ICEA) by the end of 2025, the country would be in a position to manufacture 50 crore 5G handsets. In end-2023 this number was only around 15 crore. In such a scenario it would constitute more than 70% of the total smartphones base.
ICEA chairman Pankaj Mahindroo told the newspaper, “The growth will be driven by consumers demanding faster connectivity options, coupled with a gradual decrease in 5G smartphone prices, especially with models above 13K and those below 10K becoming predominantly 5G-enabled.”
Right now, only 1% of all handsets sold at less than Rs 10,000 in the country are 5G ones. In 2024, this could gallop to 14% in 2024 and further to 45% in 2025. These figures are revealed by Counterpoint Research, a leading market research firm.
In order to stoke demand of 5G services, telecom companies are aggressively pursuing pan-India rollouts. Flooding the market with HD content would also fuel appetite for 5G smartphones among the masses.
From December 1, big brands such as Samsing, Xiaomi, Oppo, Vivo and Realme slashed prices of their 4G handsets and the 5G ones launched earlier in 2023. This will help liquidate existing stocks before the New Year.
“We’ve already asked retailers to clear out 4G smartphones priced in the ₹10K-20K range as top smartphone brands are coming up with 5G devices at aggressive prices this month and ensuring adequate supplies. With multiple 5G smartphones priced under 15K launching this month, everyone is gearing up to clear 4G stocks,” Kallash Lakhyani, chairman of All India Mobile Retailers Association told the newspaper.
The availability, price war and HD content might result in a scenario where nearly 94% of all handsets in the Rs 10,000-20,000 range in 2024 would be smartphones. In 2025, almost 99% will be 5G ones, thinks Tarun Pathak, research director at Counterpoint.