Chinese handset manufacturers Huawei and ZTE are getting ready to give players like Nokia, LG and Samsung a run for their money by retailing their CDMA mobile phones under their own brand names, marking a shift from the practice of bundling the phone with a mobile service provider offering.

Both companies currently have tie-ups with CDMA service providers which buy the phone from them, use their own brand on the phone and then bundle it with their service.

By delinking the phones from the service, they will now offer branded phones for both CDMA and the more popular GSM service. Huawei, for instance, is going solo from September 29 and plans to retail 80 per cent of its handsets under its own brand-name next year.

“Bundled offerings make it difficult to leverage our brand name with consumers,” said a Huawei spokesperson.

ZTE has similar plans. So far, the company has tied up with operators like Reliance Communications, Tata Teleservices, Vodafone, Spice Telecom and Aircel for their bundled offerings.

“We plan to enter the retail market by the end of this year, after we launch in China and the US,” said D K Ghosh, chairman and managing director, ZTE Telecom India.

He said the starting price for ZTE’s products will be $20-25 (Rs 900-1200) and that the company was exploring tie-ups with retail stores and chains. The company expects to ship about 10 million units this year and foresees the India business overtaking its Chinese business. India currently contributes about 10 per cent of its revenues of around $700 million (Rs 3,220 crore).

The move to delink CDMA phones from service providers is being pushed by Qualcomm, which owns the CDMA technology.

“India will be the first country where this concept will be launched. Operators as well as handset manufacturers are already working on it and by early next year consumers will be able to avail of this,” said Thia Rajagopalan, director of business development, Qualcomm CDMA Technology.

An executive of a major mobile handset company however dismisses that the incumbents would face any kind of serious competition from the Chinese manufacturers.

“There has been competition many forms in this market and this is just one of them. A minimum scale is required to succeed in this business, since it has become a volume game. So the new entrants will have to weigh their options,” he said.

Source:business-standard