Political-Legal Factors

Enlightened Regulation for setting up industry The Indian Government has been promoting market liberalization and simplifying regulation. Licence Fees 10%-15% of Revenue Instead of a fixed amount irrespective of the operators revenue. The fixed amount license fee posed a serious entry barrier to smaller operators and service providers before, now with fee linked with revenue, small players can grow, evolve and diversify into different segment and offer innovative products and services to the market. Most stringent FCC ( Federal Communications Commission) norms for mobile handsets

The permissible amount of radiation depends on the part of the body:

Head: up to 1.6 W/kg Whole body: up to 0.08 W/kg Hands, wrists, feet, and ankles: up to 4 W/kg
From 1st Sept. 2013, only the mobile handsets with revised SAR (specific absorption rate) value of 1.6 W/kg would be permitted to be manufactured or imported in India. The mobile handsets with existing designs which are compliant with 2.0 W/kg averaged over 10 gram of human tissue, continue to coexist up to 31st August 2013. SAR value information display on the mobile handsets like IMEI (International Mobile Equipment Identity) display to be made available to the consumer at the point of sale. All cell phone handsets sold in the market in India shall comply with relevant standards and shall be available in hand free mode.

ECONOMIC ENVIRONMENT

The state of the economy- developing economy like India is the potential market of handsets as these countries have many of service providers so the demand of reliable and efficient handsets. Only 43% of market penetration. Income distribution- Income distribution basically related to the section of the society, high income group, high middle class group, middle class group, low middle class group & low class group. The preference of handset varies according to the income groups. Market innovation has contributed to the reduction of the cost of ownership and made services more accessible for low income groups which are very price sensitive & offer very cheap handset to the public and exploring attractive VAS which are appealing to different segment of customers. Affordable Handset The availability of low cost models from handset manufacturers price as low as Rs1, 300 to 1,400 (US$ 29 to 32)

SOCIO-CULTURAL FACTORS

Social recognition Increasing need of social recognition among the masses, which is further fuelled by lowering of tariff rates by the service providers. Great Gifting Idea Higher spending power among the masses, festivals and marriages and other socio cultural factors affect handset sales. Changing demographics & buyers aspect Changing demographics & buyers aspect such as age, gender, education, income, occupation etc. also determines the buying behavior thus creating an opportunity for differentiation. Technological FACTORS No longer a communication device Cell phones have no longer been limited to communication but also have indirectly emerged as a means of reducing face to face social interaction as people can listen to music, can watch movie on their cell phone and so on. Accelerating the pace of growth. consumers are adopting new technologies faster hence companies needs to react quickly to changes within their operating environment. Upcoming technologies Providing all VAS & 3G related feature in low cost.
Threat of New Entry: - Time & Cost of New Entry is very low. The mobile industry is free of barriers Only Cost Advantages

CONCLUSION: LOW

Buyer Power: - Number of Customers is very large Price Sensitivity is very high Cost Of Changing is very less

CONCLUSION : VERY HIGH Threat Of Substitution: Not many substitutes are available for mobile phone Only 43% market has been penetrated.

CONCLUSION : LOW Supplier Power:

Most of the suppliers are in house Need to keep the supplies cost to be very low to keep the cost low

CONCLUSION : MEDIUM COMPETITIVE RIVALRY No. of competitors is very High

Samsung, Nokia, LG, Videocon, LAVA, GFive, I-ball etc. - Already contains numerous strong or aggressive players