Second hand phones drive mobile boom

From the plebe to the peer, the cellphone has undergone a mighty metamorphosis - the plaything of the opulent is now a classless essential.
A rapidly expanding cellular circuit is sweeping across all sections of society - from vegetable vendors to milk sellers, maids and safaiwallahs - thanks to the burgeoning second hand cellphone market and the tariff war, those in the business say.

According to industry estimates, the GSM subscriber base touched 46.87 million last month.

"It is essentially the low cost of cell phones - whether new or second hand - which is responsible for the boom. For a user his relationship with the mobile begins with the instrument. If it is within his range, then he looks for various tariff plans available," says a Reliance Infocomm official, pointing out that "second hand cellphones are certainly driving the market."

"There is a large section of people - the lower income groups, who do not mind using a second hand phone. This is generating the business at the retail level on its own," he says adding, it is difficult to quantify the second-hand cellphone market as it is scattered and in the unorganised segment.

"The second hand mobile phones cost anywhere between Rs 800 to 1500 here but in villages and small towns, 7 to 8 year old models are available even less", says Madan, who runs the business in Central Delhi.

On the factors behind easy availability of second-hand phones, Madan says "the Indian mobile phone user refuses to junk an old instrument but passes it on to a new low-end user, helping the second-hand market to thrive."

"Every second day a new model hits the market. People now have the experience of using coloured handsets, camera phones and now there are even data enabled phones coming in the market.

Earlier a user changed the mobile every two years or so, now this time period has come down to 12 months or even less," says Ashwani Kumar, a cellphone retailer.

"The prices of the new models have also come down, which has helped this trend," says Kumar, but a new customer in the lower end prefers to go mobile for as little an entry cost as Rs 800. Price is still the biggest determiner of choice, he says.

"Most of the first time phone users generally went in for a landline. But what we are finding now is that they are skipping this and going directly for the cellphones because of low cost and mobility," says the Reliance official.

On the future of mobile telephony, he says "the potential for growth is still very high. The mobile density is still 14 per 1000 in India."

"Even today, you see big crowds at PCOs. These are people who neither have a landline nor a mobile... all of them hold big potential to be the future mobile customers," the Reliance official says.