Vodafone To Make Ultra Cheap Mobile Phones
Vodafone may not be a well-known brand in Pakistan but it could change soon - here’s why: Vodafone, the top cell phone companies in Europe, have announced that they will sellreally cheap phones targeted to developing countries. How about a mobile phone for Rs 1500 with a Vodafone brand on it? As you can guess it will be manufactured in China but it will have the brand name of a top carrier. Should be much better than the low quality phones coming to Pakistan from unknown manufacturers in China!
In April Vodafone bought 52% of Hutchison Essar in India thus making their arrival in emerging markets formal. Now they are the very first big carrier who is about to compete with the handset makers such as LG and Nokia. This week, Vodafone unveiled two very low-cost handsets (US$25-45, PK Rs 1500-2700) aimed primarily at customers in emerging markets such as South Asia and Africa.
WSJ made an interesting comment on this:
Cereal and cellphones may have little in common. But wireless-service provider Vodafone Group PLC has been cruising the supermarket aisle for inspiration. The world’s largest cellphone-service provider by revenue is rolling out lines of Vodafone-branded handsets, akin to supermarkets stocking their own store-brand products alongside established brands.
Behind the move is Vodafone’s desire to drive more people to use its services, both high-speed data services in established markets as well as more basic calling and text-messaging services in emerging regions. In some cases, the handsets may be packaged with Vodafone’s or a partner’s service.
Naturally Vodafone will want to sell its new phones to Pakistani market. Look out for some interesting deals in the near future as Vodafone settles down in India and contemplates its next move. Just speculating, how does a vodafone-ufone deal sound? At least it rhymes!
BusinessWeek also covered this story - Read Vodafone’s Low-Cost Cell Phone Gambit at BusinessWeek or read the excerpts below.
Vodafone executives announced in London that the company is rolling out its own line of ultra-low-cost handsets. To be built by a Chinese partner, the GSM-standard phones will carry the Vodafone brand name and sell for $25 to $45, depending on locale.
With its unexpected move, Vodafone (VOD) becomes the first carrier to introduce its own phones intended specifically for customers in developing countries. Until now most so-called “private-label” devices resold by operators have been aimed at the high end of the market. “[These] will be the lowest priced GSM products ever,” crowed Jens Schulte-Bockum, Vodafone’s global director of terminals, at the event.
True enough, but Vodafone could have a tough time getting its newfangled devices into the hands of consumers. For one thing, it faces stiff competition from the likes of Nokia (NOK), Motorola (MOT), and Sony Ericsson, all of which market their own inexpensive models and already have a big head start in markets such as Africa, South Asia, and Latin America [see BusinessWeek.com, 1/31/07, "Handset Makers' Emerging-Markets Boost"].
Dealing With Saturation
In February the GSM Assn. made its latest award in a series of tender offers designed to drive inexpensive handsets into developing economies. This time South Korean giant LG Electronics was selected to supply millions of cheap, third-generation [3G] phones to a dozen carriers who have signed up for the plan. [Motorola has won several earlier bids for second-generation handsets, while Nokia largely sat out the program.]
Yet despite the crowded field, Vodafone sees value in getting devices bearing its name into the hands of new buyers. It’s all part of the Newbury [England] company’s two-year-old strategic push to fuel growth by moving into emerging markets. With markets near saturation in the developed West and Asia, Vodafone has little choice but to expand elsewhere.
Turning on a Dime
But Vodafone lacks brand awareness in markets such as India, so it’s hoping that selling phones carrying its own moniker will bolster its image and visibility among first-time buyers. Despite a relatively late market entry, the company argues it can compete successfully against Nokia and others, selling “double-digit millions” of the candy bar-shaped phones over the next three years.
Made by Chinese up-and-comer ZTE Corp., the initial lineup of GSM phones includes a monochrome-screen model called the 125 and a color-screen version called the 225. Both should start shipping in the next week to Egypt, Tanzania, South Africa, and Romania. Vodafone says it’s also working with French electronics giant Sagem on later additions to the lineup. Keeping the price down is the key. “Every 10 cents we take prices down on these products extends the reach of mobile telephony in these markets,” Schulte-Bockum says.
Selling inexpensive handsets pre-loaded with Vodafone software also is a camel’s nose in the tent to boost usage of mobile services. Like most carriers, Vodafone still gets the vast majority of its revenues from good, old-fashioned voice calls and text messages. But it sees opportunities, even in the developing world, to sell other wireless applications such as mobile banking.
Changing the Sales Model
“Vodafone has the product, but not necessarily the brand and distribution,” says Neil Mawston, associate director of market researcher Strategy Analytics in Milton Keynes, England. “And distribution will be their biggest challenge.”
That’s because emerging markets tend to rely on a completely different sales model. In the U.S. and much of Western Europe, upwards of 90% of handsets are sold via operators or operator-linked stores. But in China, by comparison, carriers account for only about 5% of cell phone distribution, says Mawston. The rest happens via independent retailers–often just mom-and-pop stores.
Sweet Spot for Buyers
Vodafone’s other problem is more subtle. No doubt low price is essential in emerging markets, where a handset can be the most expensive item a poor consumer has ever purchased. But for that very reason, buying name brands acquires significant importance. Analysts concede that Vodafone is a known entity–but global mega-brands like Nokia and Motorola have even more pulling power.
“In these markets the brand is a very important part of what a mobile phone represents; it’s how people express themselves,” says Gartner’s Milanesi. In India, she notes, buyers sometimes shy away from the lowest-price model “because they don’t want their family and friends to think that’s all they can afford.” Milanesi reckons the sweet spot for “aspirational,” low-cost phones in emerging markets is around $50 to $70.
Still, observers praise Vodafone’s low-cost handsets as a useful experiment. The move should help get the Vodafone name out to a new generation of customers. And it carries little financial risk, notes Strategy Analytics’ Mawston. “If it flops, Vodafone hasn’t lost much because ZTE bears some of the costs,” he says. “But if it goes gangbusters, this creates a huge opportunity.
I cant believe this………Vodafone mobiel for only ranging Rs. 3000…..awesome
Heres another speculation; Vodafone is currently planning to become a stakeholder in Mobilink with OT.
Thats really unbelievable, its great 4 common people
Vodafone is planning to be a part of Pakistan mobile industry is this true??
yes you are comming in pakistan we want to see you in our country
I think thats a good opportunity for Vodafone to target Pakistani market as it is in developing stage and also it is good for the households of the country to have a cheap mobile phones…….
I can’t believe it that vodafone is Coming in Pakistan…….
well ok they are coming to pakistan! but in presense of well-established companies like mobilink, telenor, ufone, warid, and now zong too. they might not be successful enough here. even then we will welcome them.
but when are they coming?
I don’t see wats the big deal about this!i mean excellent as far as cheap phones being made available in the market. but not so good. we need to establish local manufacturing processes. with nokia or ne other comany. but if u really want to take advantage of this so called telecomm growth in pakistan then we have to consider all the expects of the chain which can provide benefits. a setup of this kind shld’ve been done 10years back! n now with cellphone set imports exceeding a billion dollars we still think this industry is growing!if so definitely not to its fullest potential.we have the human resource and the amrket for such an industry what are we waiting for?wat are all the “saith type corporates/businessman/actually munshi’s!) looking for or porbably they are comfortable with wat they are gettin. i know nokia and other cell manufacturers would be skeptical of such a proposal but i think its high time we atleast try to push for this!
God! if i had tht kinda of capital i wld’ve invested it right away..n ppl bfore u comment on this..business men in paksitan do have that kind of capital!
well i wana know where these vodafone is available
if i wana to buyy, from where should i get ths……….
Well its Good to hear that Vodafone coming to Pakistan , may i know when they are launching and where is there offices now the are Planning from .
Best of Luck vodafone ………………………………………………………………………………………………………………………………………………………….:)
Its really good for pakistan & people of Pakistan
why don’t vodafone and telecome become 1 ?
i am very exited voda fone is coming in pakistan.please quick opening in pakistan.thanks BEST WISHES . ADEEL RIAZ PAKISTAN
f voda fone came to india and captrud all the market then why not to pakistan
If Vodafone is doing this then it’s awesome to have themm in Pakistan!!!
Dear Team Voda Phone !
Do you mind telling me, regarding the opening of “JOBS” in voda phone in Pakistan…..
Thanks & Regards!
Mustafa Ali
they are not coming to Pakistan it was fake news
its good for pakistan if vodafone is coming in pakistan ……
I would like to wellcome vodafone to pakistan and it`s global satellite mobile market.
I have been using Vodafone`s service in UK and in EU and must say that they really do can call theirselves a telecommunication provider company, so far in pakistan the telecommunication companies in whole are not reliable regardless of which provider is providing the service or whatever technology is being used it is just not enough.
In addition to the above comment I would like to add that service provided by Vodafone is so right that I wouldnt mind investing within the company myself or work within the company.
From Kashmir
I want to purchase a frunchise of voda phone in karachi. So, please inform me requirment to get a frunchise.
Thanks & best regards,
Owais Rahat.
hmmm guyz any info on when da r startin thr service
well if they come over they really need to bring new rates over here in Pakistan as all companies are lowering there call rates & they also need to bring a at least 3 or 3.5 g technology to Pakistan as this is the only way to win the & capture the market, cheap phone is not a issue any more all are having at least one china hand set nowadays in there hand, so now they need to bring the technology that Pakistani people haven’t seen yet.
Dear Vodafone Manager Marketing I am searching vodafone
office at karachi.. Regarding for ourdoor advertising.. Please
send me your karachi office address and telephone number
My Cell # 0321-2426200
Muhammad Ayub
hello sir,
tell me plz, when vodafone is coming in pakistan?
end 2008 or mid 2009
hmmmmmmmmmmmmmmmmm!!…… Welcome VodaFone……it will be a great pleasure to see you in Pakistan. VodaFone got a very vast network all over the World and it will be an hounour for Pakistan that such a company is coming. Wish you a very warm welcome and Wish you Best of Luck!!….. i will love to work with. I want to purchase a frunchise of voda phone in Islamabad.
i will really welcome and appriciate and help to VODAFONE in pakistan,i love vodafone and i m using it from last 8 years in italy and its really fantastic to use in pakistan also,
i heard that vodafone would be starting on 1st january 2009.
is that true ?
Salam to all brothers, its a great news for pakistani government and the people, we hope to launch vodafone in 2011 approx, at the moment talks are going on with authorties and if vodafone did land in pakitsna than one thing i know is fo sure that they will wipe out the market cause its the biggest mobile industry in the world, we wish all of you best of luck and pray that it would be as beneficial for people of pakistan as it is for vodafone, best wishes.
its a great news that voda fone comming here in pakistan …
i will really welcome and appriciate and help to VODAFONE in pakistan,i love vodafone
Dear Vodafone Manager Marketing I am searching vodafone
office at karachi.. Regarding for ourdoor advertising.. Please
send me your karachi office address and telephone number
My Cell # 0345_7909320
is vodafone coming to Pakistan? but is it a mobile handsets company or its mobile service company and is its service coming to pakistan? pleez tell me on my email: hitler4132yahoo.com. thnxxxx!
Dear sir
Please can u tele us when r u coming in pakistan.and your conact no…..
Thanks Best Regards,
NASIR IQBAL
Markiting Maneger.
Hafiz Bros advertising
Mob:0321-450-6044
Email:nasir.message@gmail.com