25 years of Mobility in India: The journey to becoming the world’s second-largest smartphone market

25 years of Mobility in India: The journey to becoming the world’s second-largest smartphone market | Soochna
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In 1995 all it began, when India’s first-ever cell phone call was made between Kolkata and New Delhi. And now, 25 years later, India is the world’s second-largest smartphone market.

Would you pay roughly Rs 4,900 for a prepaid SIM at a call rate of Rs 17 per minute for incoming and outgoing? This sounds mostly irrational when it is considered that India has one of the lowest call-tariffs in the world. But if you owned a cell phone in 1995, these were the rates you would have to pay. 

In 1995, exactly 25 years ago from today, the first-ever cell phone call was made in India when Jyoti Basu, West Bengal Chief Minister, sitting in The Writer’s Building in Kolkata, spoke to Sukh Ram, Union Telecom Minister at Sanchar Bhavan in New Delhi.

The notable call was made on a GSM network, and between two Nokia handsets over Modi Telstra’s MobileNet service. This stirred the starting of a telecom revolution in India — a movement known by the likes of Jio, Airtel, Vodafone Idea, and BSNL currently.

GSM vs CDMA

In 2002, CDMA entered the market. US-based chipmaker Qualcomm, CDMA was a second-generation telecommunications standard. By then, GSM was already a dominant standard for 2G communications, holding 80 percent of the market. Several telecom companies in India worked on a GSM-based network. But Tata Tele and Reliance went ahead and began operating on a CDMA-based network. Even, Hutch became a CDMA operator. As a result, CDMA was able to stabilize its market share at 20 percent for that time.

Even at the same time cell phones were so expensive, Also, as mobiles did not have tracking systems or security measures at the time, it was easy for burglars to swipe these devices from unsuspecting people and households.

As a result, with the rise of mobile phones and SIMs in India, the grey market also grew. So, the retail market for cell phones was snapped between legal sales of branded phones and sales of smuggled mobiles.

Despite having mobile phones, most of India that could afford telephone services still relied on landlines. And at that time the government-owned BSNL and MTNL were the only entities allowed to provide landline phone service in India.

But in 2004, the rapidly growing Indian smartphone market coped with a crucial milestone. For the first time ever, the number of cell phone connections in the country extended the number of fixed-line connections. However, it still took some time for India’s mobile manufacturing industry to pick up steam. Cut to 2014 — India has only two mobile manufacturing units. But, with the internet becoming cheaper, the entry of e-commerce in India, and the influx of Chinese brands keen to sell at low prices, the demand for smartphones skyrocketed.

Till 2014, India has only two mobile production units. But, with the internet becoming cheaper, the entry of e-commerce in India, and the influx of Chinese brands eager to sell at low prices, the demand for smartphones lifted.

Jio enters the market: 

In December 2015, Mukesh Ambani-owned Reliance Jio was launched. In September 2016, the service became commercially available, launching 4G services with free data and voice call until March 31, 2017.

Till 2017, Jio had attained 100 million users. Its entry in the market triggered a massive reduction in data prices across networks, adapting smartphones all over India. So, at present Jio is the largest mobile network operator in India.

In the same year, the manufacturing and assembly of mobile phones became a keystone of Prime Minister Narendra Modi’s ambitious Make in India campaign. In July 2017, Mukesh Ambani made another strategic announcement – the launch of JioPhone, a 4G handset that further changed how Indians use mobiles.

In 2019, the number of cell phone manufacturers grew in India from two to over 60. At the same time, India’s cell phone market excelled from the US for the first time on an annual level. And it became the second-largest smartphone market.

At present, all Chinese brands are leaders in India, with the exception of Samsung, which is from South Korea. India’s smartphone market is led by Xiaomi (30 percent market share), Vivo (17 percent market share), Samsung (16 percent market share), Realme (14 percent market share), and Oppo (12 percent market share).

Despite the present clarification to boycott Chinese goods, Chinese smartphones that assemble in India continue to dominate our market. Samsung is now looking to capitalize on the anti-China sentiment and arrest its declining market share.

The administration is also looking forward to boosting local production units through initiatives such as the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and the scheme for modified Electronics Manufacturing Clusters (EMC 2.0). 

These are anticipated to draw investments in India, boost local production of mobile phones and other parts to Rs 10 lakh crore by 2025, and guide in a new era of smartphone manufacturing in India.


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