Competitive Strategy Group Assignment Company:

Team: Study Group A3 SAKSHI CHAND, RANJANI KRISHNAN, S SUNDAR KUMAR, DEEPAK GAUR, SOHIL AGGARWAL
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Executive Summary Micromax is one of the biggest Indian domestic mobile handsets company and has been growing explosively in the fast growing telecom market since they started operations in January 2008. Their market share stood at 6.24% for the March 2010 quarter, in less than 3 years of starting their operations. Micromax has been able to capture the said market share by following some extremely effective pricing strategies. With Micromax, its been more about affordable handsets which shows in their average selling price of Rs. 2,275.98 for the March 2010 quarter. Micromax, once a Printer & IT hardware dealer has given tough competition for 2nd position in mobile market after Nokia & Samsung and is ready to list on stock exchange very soon. All credit to its sheer innovation and creativity. Micromax has been able to achieve a unique and diverse product mix. They have over 30 handset models selling in the Indian market, and that helps in not relying on just one product to drive revenues, as no single handset accounted for more than 20% of their revenues. Not only that, Micromax has also been able to spread itself Pan-India. They are well diversified across states, and no single state accounted for more than 10% of their sales. They have understood the Indian Telecom market really well and as a result, have kept themselves focused on not only new but also the replacement handset market which constitutes nearly 65% of the total handset market (until 2010). It sells anywhere from 700,000 to one million mobile phones every month. And by its own estimates it is now selling nearly Rs.1,500 crore worth of phones annually. The dual-SIM feature is today present in 20 to 30 percent of all mobile handsets sold in India, estimate experts. Yet market leader Nokia does not have a single dualSIM handset in its vast repertoire of phone models for India. Micromax offers this feature on nearly 22 out of the approximate 26 phone models it sells in India. Through this report, we plan to bring on paper the following aspects: a. b. c. d. What is the industry like? What is the competitive positioning? What value chain attributes support such a position? How sustainable is it?

(Sources from where inputs are taken for this report Microsofts Draft Red Herring Prospectus filed with SEBI, IMF World Economic Outlook Reports, McKinsey Report, TRAI Database and Report, Analyses Mason Reports, Wikipedia, Google) Brief History of Micromax Micromax is one of the leading Indian Telecom Handset Companies with 23 domestic offices across the country and international offices in Hong Kong, USA, Dubai and now in Nepal. It was one of the largest mobile handsets company in India as at March 31, 2010 in terms of units shipped during Q4, 2010 and the third largest mobile handset seller in India for the financial year ending 2010. It has been the fastest growing among India's top five mobile brands during the twelve month period ended March 31, 2010 compared to the twelve month period ended March 31, 2009 in terms of the number of shipments Basis its revolutionary outlook and a comprehensive R&D at its helm, Micromax has successfully generated innovative technologies that have revolutionized the mobile handset space in India. Micromax is on a task to successfully overcome the technological barriers and constantly engender life enhancing solutions. The companys mission is to develop path-breaking technologies and efficient processes that incubate newer markets, enliven customer aspirations and continue to make Micromax a trusted market leader amongst people. The Micromax ideology stems from its rooted belief in Innovation and delivering nothing short of the best. (Source: IDC's India Quarterly Mobile Handsets Tracker, 1Q 2010, June 2010 release). Founded in 1991 by Rajesh Agarwal, Micromax in its original avatar was a distributor of computer hardware equipments. In 1998, three more people - Sumit Arora, Rahul Sharma and Vikas Jain joined Micromax as co-founders. The company branched out from a mere distributor to a marketer of telecommunication equipments. With young enthusiasts as its anchors, Micromax created a niche for itself in the telecommunication industry. Micromax ventured into the telecommunication industry with an end-to-end solution of Fixed Wireless Devices and Wireless Data Cards. In the year 2008, after delivering upon the technology of fixed wireless-powering desired products, the company forayed into one of the most predominant genres of telecommunication Mobile handsets. The entrepreneurial idea stuck the team somewhere around 2007. On a hot summer afternoon, executives at this small Indian pay phone company noticed a curious sight. In a village in the eastern part of the country, they watched people line up next to a man with a car battery strapped to the back of his bicycle and hand him a few rupees to plug their cell phones in for a half hour's worth of charge. The villagers' homes didn't have electricity.

The Micromax Team Founders (from left) - Rahul Sharma, Rajesh Agarwal, Vikas Jain & Sumeet Kumar The brand wanted to create a base before taking on the large players. Hence as a goto- market strategy, Micromax concentrated on the rural market first. It was a different move altogether since most of the marketers tend to concentrate on the urban markets first and then move to rural markets. Less than a year later, Micromax launched its first phone, X1i (refer picture below) in the rural market with a very unique USP - 30 days battery standby time. Priced at merely Rs 2,150, X1i was lapped up by the rural market. It came with an oversized battery, a small screen, and tweaked electronics that made the phone run for as long as five days, and on standby for as many as 30 days.

Micromax X1i Undoubtedly, 80% of its sales come from the rural areas substantial factor behind Mciromaxs explosive growth. After building a strong presence in the rural market, where the prominence of both subscribers and operators is rapidly increasing, Micromax is now progressively moving towards establishing its foothold in the competitive urban market as well.

Headquartered out of Gurgaon, National Capital Region, Micromax has introduced 37 phones in just a couple of years since launch of its operations. It has been designing its cell phones in India and manufacturing with partners across China and Taiwan Its been since then that Micromax has received commendable response for its unique and interesting handsets. Innovation, Cost-Effectiveness, Credibility and an Insightful R&D, have now become synonymous to Micromax in the telecom vertical. Today, Micromax has become a brand which people relate and look up to for realizing their individual device preferences and other out-of-the-box solutions. a. WHAT IS THE MOBILE HANDSET/TELECOMMUNICATION INDUSTRY LIKE? Mobile Handset Industry Growth of the Indian Economy Over the last few years, India has shown strong economic growth. In Fiscal 2010 the growth rate for India's gross domestic product ("GDP") is estimated to have been 7.44%, and in Fiscal 2009 and 2008, GDP growth is estimated to have been 6.72% and 9.22%, respectively, according to the Central Statistical Organization (CSO). Economic growth is expected to continue into the immediate future with the International Monetary Fund (IMF) estimating Indias real GDP growth at 9.4% in 2010 and 8.4% in 2011 (Source: IMF World Economic Outlook, July 2010). The McKinsey Global Institute estimates that Indias real GDP will grow at a combined annual growth rate (CAGR) of 7.3% from 2005 to 2025. Indian Telecommunications Services Market India is the second largest and the fastest growing telecom market in the world in terms of number of wireless connections, according to the Telecom Regulatory Authority of India (the "TRAI"). With the implementation of the GOI's Broadband Policy in 2004, the number of broadband connections has increased to 8.77 million subscribers as of March 31, 2010, and according to TRAI, the President of India has set a target of 100 million connections by 2014. The size of the mobile wireless services market has increased by 103.70% from 286.86 million subscribers as of June 30, 2008 to 584.32 million subscribers as of March 31, 2010. While wireless penetration in urban areas has increased significantly over the last few years, rural and semi-urban areas continue to be under-penetrated. The overall wireless tele-density in India has increased from 24.95% for the quarter ended June 30, 2008 to 49.60% for the quarter ended March 31, 2010 (source TRAI). Indian Mobile Handset Market

The Indian mobile handset market has grown by 30.17% from 116 million handsets for the twelve month period ended December 31, 2008 to 151 million handsets for the twelve month period ended December 31, 2009. The growth has been driven by the growth in medium ASP devices (devices with a price in the range of Rs 2,000 to Rs 5,000). The contribution of medium ASP devices has increased from 34.48% for the twelve month period ended December 31, 2008 to 45.03% for the twelve month period ended December 31, 2009. Key Growth Drivers for the Indian Telecom and Handset Market A number of factors have contributed to and will continue to drive growth in the Indian telecom and handset market, including the following: Indias economic growth has helped increase household incomes and consequently consumption, especially among young Indians who are increasingly investing in various entertainment and communication services. Indias favorable demographics in the coming years will continue to add impetus to the growth of the telecom and handset markets. The growing need of high mobility and connectivity at affordable prices. In order to curtail their network deployment costs, many service providers are considering sharing both passive and active infrastructure with each other. Common infrastructure will improve coverage, reduce costs and enable operators to expand telecom services at affordable prices to customers. Low overall mobile penetration indicates tat a huge market is left untapped and that there exist huge expansion opportunities in the rural and semi-rural markets, which currently have low tele-density. GOI telecom policies have emphasized the need for expanding telecom coverage to include rural areas and empowering rural Indians through access to mobile telephony. Besides the presence of major telecom handset manufacturers, including Nokia, Samsung, LG and Motorola, and leading global telecom service companies and infrastructure majors, such as Vodafone, Singapore Telecom, AT&T, Ericsson, Alcatel and Siemens, there is strong competition from growing domestic handset companies and Indian mobile operators. Furthermore, increased competition among service providers created as a result of India allowing an unlimited number of service providers in each service area has contributed to and will continue to drive the growth of the telecom sector in India. The demand for more sophisticated and innovative e-mail and multimedia based services, as well as gaming and music related offerings is likely to fuel growth in The delivery of value added services (VAS). The advent of 3G will also add impetus to

the growth of the VAS market due to 3G's faster network capabilities. Consequently, mobile devices will also need to become more sophisticated. As wireless teledensity increases, particularly among lower income Indians, the ARPU (average revenue per user for telcos) will continue to decline. As ARPUs decline and voice gets commoditized, both handset manufacturers and operators will need to develop VAS so as to create high yielding revenue streams, and attract as AS well as retain customers by creating a basis for differentiation. The growth in VAS is likely to impact the growth of the telecom and handset markets. The advent of 3G has stimulated the introduction of 3G compatible mobile devices, introduction and expanded offerings of applications, which can take advantage of the superior speed and data transfer capabilities of 3G, from the providers of hosting, billing and network management services and content provi providers. b. WHAT IS MICROMAXS COMPETITIVE POSITIONING? Its core strategy statement -

Micromaxs vision a. To develop path-breaking technologies and efficient processes. breaking b. To incubate newer markets, enliven customer aspirations and continue to make Micromax a trusted market leader amongst people. Source www.micromaxinfo.com Diverse Product Mix at Un-beatable prices beatable prices: Micromaxs competitive strategy is very much in its vision statement brought out above from its website. It clearly understands the pulse of consumers in the Indian market. Be it phones with long lasting battery life, dual GSM capability, low cost QWERTY low-cost instruments, universal remote controls and/or gaming phones, Micromax has delivered nstruments, it all and in the best price. In fact, such has been its product diversification that no single mobile handset model in its stable accounted for more than 20% of revenues du during fiscal 2010. Moreover, no single Indian state accounted for more than 10% of sales volume in fiscal 2010, indicating the diversification of the brand across geographies. To add, total revenue share through its 10 largest distributors in fiscal 2010 ac accounted for
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less than 56%, with only one distributor accounting for more than 10%of its sales by volume.

Categories of Micromaxs handsets (Source www.micromaxinfo.com) As it can be seen above, Micromax offers an un-comparable product mix, a mix which no other player in the market can boast to come out with. At continuous intervals, Micromax molded the market situation into a business opportunity for itself. As the tariff wars amongst telcos gathered heat, Micromax launched dual-SIM handsets to allow customers fulfill their need of carrying two numbers. In fact, at a time when market leader Nokia didnt have even one dual-SIM phone in its stable, Micromax had already launched 23 dual-SIM phones out of its total product portfolio of 27 phones! It launched phone-cum-stereo with 3D surround sound fed by Yamaha and Wolfson at less than Rs 5,000 to capture the youth market. In Feb 2010, it launched Bling, phone with Swarovski embellishments targeted to women customers. It became an instant hit. Priced at Rs 5,500, it gave competitors a run for their money. Few months later in May 2010, it came out with a phone that could switch TV channels and even AC temperature, basically act as a remote. Targeted at tech-savvy customers and priced at Rs 2,999, it was tough for customers not to fall for it. Moreover, its ability to contain costs and launch these products in the market at unbelievably low prices strengthens its competitive positioning in the market.

Below we have brought out market pricing for Micromaxs handsets which clearly shows the cost containment efforts the company has been investing it right from the beginning. It has managed to maintain its average cost per handset to consumer way below Rs 2,500, a feat not possible for even the leading handset model manufacturers in the , manufacturers country.

arket strategy: Reverse Go-to-Market strategy As an exception to the regular market entry strategy where a company launches itself in established markets, Micromax chose to tread upon the path less travelled. It began its operations by launching a mobile handset designed especially for the rural markets. Priced at Rs 2,249 upon its launch in April 2008 and currently priced at Rs 1,999 1,999, Micromax X1i has a battery that gives its customers 17 hours of talk time and could go on 30 days stand-by on a single charge. Launching itself in the rural market was by Micromaxs deliberate attempt to make its presence felt in the industry, especially with industry, the presence of tough competitors like Nokia, Samsung, Motorola and LG. Rural market was THE segment for Micromaxprobably the best market for it to maximize its or Micromaxprobably returns, provided it offered products at reasonable prices. Lack of continuous electric supply was a big roadblock for rural sectors growth and all that was needed was a technological innovation to bridge the gap between present and future. No other competitor in India could manage to deliver that kind of product, thus rendering Micromax clear edge over its competitors. Effective Promotion Strategy: Micromax was one of the biggest spenders at the recently concluded version of IPL. It the has focused a lot of its promotional activities surrounding Cricket, the game that connects the nation. Off sports, it signed Akshay Kumar, one of the leading Bollywood

actors as its brand ambassador that enabled it to connect a close chord with the masses at large. As part of its promotion strategy, it targeted school/college students. It perceived these customers to treat mobile phone more of a need than just luxury owing to the parental involvement. Parents/Guardians need to be aware of the whereabouts of their wards in todays time. Be it coaching classes, college, even out with friends or anything else, parents wanted to be in touch with their kids without having them possess a highend expensive phone. Micromax launched a special offer whereby students could go to any of its outlets near their school/college, produce their ID cards and avail a certain percentage of discount. This offer was further extended to the institutes faculty, thus creating a separate loyal customer segment. Product Placement Strategy: As an effort to place itself effectively, Micromax offered higher margins to its channel partners. It extended even higher commission to channel partners who were willing to stock-up its products. Strong product development capabilities resulting in efficient and speedy execution capability: Micromax has been investing heavily towards product development and designing. It set up a R&D facility in Gurgaon and had an in-house team of 24 engineers in Product Development as of August 2010. Also, Micromax operates a multi-sourcing strategy for its chipsets in order to increase efficiency of product development efforts. As part of its business environment, its product development team works in sync with the chipset manufacturers to assess the technical feasibility of its new ideas, thus ensuring that its time to market is at the minimum. Currently, its time to market stands around three to six months on an average. Its because of this low time to market that Micromax, since its launch in 2008 has introduced over 40 distinct mobile handset models in the market. Extensive nationwide distribution network: Micromax follows a three-tier distribution network comprising more than 60 state and regional distributors across 23 states in India. These state and regional distributors sell products to more than 800 local distributors nationwide and they further distribute products to retail outlets who in turn sell to customers. Micromax has also partnered with a national distributor that targets organized retail outlets and assists Micromax in brand building and sales through sales channels. In less than 3 years of having begun its operations, Micromax has been able to create a robust distribution network for itself, all because of its team of 33 in-house skilled service coordinators who continuously manage its distribution network.

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Nationwide after sales support support: All of its After Sales Service Centers (ASCs) are owned and operated by third parties, with whom Micromax contracts. Over the last 3 years, Micromax has created more than 370 strategically located ASCs and 5 modular service centers. All ASCs are continuously monitored by in-house technical regional service coordinators. house Robust Financial Results: Its earnings before interest, taxation, depreciation and amortization (EBITDA) of Rs 3,377.07 million in fiscal 2010 represented growth of 539.37% against Rs 528.19 million represented in fiscal 2009, which in turn represented growth of 164.15% compared to EBITDA of Rs 199.96 million in fiscal 2008. In fisca 2010, it had total income of Rs 16,017.58 million, a fiscal 358.44% increase compared to total revenues of Rs 3,493.95 million in fiscal 2009, which in turn represented a 168.46% increase compared to total revenues of Rs 1,301.50 million in fiscal 2008. To sum up, very strong financials! All the above factors and many others help Micromax create the competitive advantage it enjoys currently in the Indian market. c. WHAT VALUE CHAIN ATTRIBUTES SUPPORT SUCH A POSITION? The Porter Value Chain framework by Michael Porter helps to analyze specific activities e through which firms can create value and competitive advantage. Below we have analyzed different aspects of Porters Value Chain that allow Micromax command the competitive advantage as analyzed by us in the part above. Also, we have highlighted in ve RED, the various attributes of Porters Value Chain that support Micromaxs competitive position.

Attributes that support Micromaxs competitive positioning in the India Mobile Handset market

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Firm Infrastructure: Micromax owns its corporate office and warehouse located in Gurgaon, National Capital Region aggregating to a total land are of 574 square meters. Its R&D facility is housed at its corporate office mentioned above. It also owns land admeasuring 1,996 square meters in Solan, Himachal Pradesh and have recently acquired land admeasuring nearly 57,000 meters in Faridabad, Haryana. They have also received allotment letter from Haryana State Industrial Development Corporation Limited (HSIDC) towards allotment of industrial plot measuring 2,763 square meters in Gurgaon. It has also identified potential site where it intends to build its proposed handset manufacturing facility from the proceeds it generates through Initial Public Offer (IPO). It has also entered into warehousing agreements with OM Logistics Limited and UTL Warehouse Management Private Limited for numerous warehouse locations over India. This level of infrastructure, we believe, is more than sufficient for Micromax to carry out its business activities smoothly and also scale up, when required. Human Resource Management: As at July 2010, company had 377 employees. Out of 355, 37 were post-graduates, 197 graduates and the remaining 68, undergraduates. 264 of its employees were below 35 years of age, thus signifying the presence of fresh blood and new ideas within the company. Since the company is not listed on the stock exchange, not much information is currently available on its Human Resource Management aspects. However, it does state in its recently filed DRHP with SEBI that, We are dedicated to the development of the expertise and know-how of our employees. Our personnel policies are aimed towards recruiting talented employees, facilitating their integration and encouraging the development of their skills. Technology Development: Its in-house R&D team of 24 skilled personnel at its Corporate HQ helps it operate a multi-sourcing strategy for its chipsets that is designed to increase efficiency of its R&D efforts by working with the best partner in a specific chipset development area. Its dedicated R&D team focuses on all different aspects ranging from Hardware, Software, Testing and Quality Assurance. Its their sheer expertise, dedication and advanced technical know-how that this team has maintained a record time to market of three to six months vis--vis time to market of 18 months taken by the larger manufacturers. We have also come across its splendid technical advancements in the different mobile handsets launched by it in the market, as brought out above in the report. Procurement: In its current business model, since it doesnt have a manufacturing facility of its own, Micromax contracts with suppliers in China and Taiwan to manufacture and
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supply them handsets per their ordered specifications. Since they have succeeded in maintaining costs over years, in fact reduce it, this model has been very favorable for them for more than just one reason. Besides the cost advantage and its control over pricing, the outsourcing helped Micromax management and team lay the initial focus on innovation, research and development. For any new venture, first 3 years are treated as a make or break period. Having outsourced the manufacturing in entirety, Micromax gained much more than they would otherwise have. However, considering they have attained that level of technological sophistication, it now plans to foray into manufacturing its phone models itself. This should give additional opportunities of cost-cutting and further price reduction to the company, thus creating value for customers and the market, overall. More than that, this would also allow Micromax to diversify its manufacturing base (in case it continues with the outsourcing model), decrease dependence over outsourced partners, control costs, manage quality and most importantly, minimize risks of operations being adversely affected by change in Chinas/Taiwans trade policies, including any anti-dumping duty or similar measures introduced by the Government of India with respect to import of mobile handsets. Operations: Micromaxs operations largely comprise of the following a. Product Development its strong technical team is entrusted with the task of discovering break-through technology and has consistently delivered results in the pasts within record time frame. b. Manufacturing this aspect is handled with Procurement wherein outsourced partners are approached to manufacture its handsets c. Marketing & Branding, Selling & Distribution and After Sales Service this shall be covered in the coming up attributes Outbound Logistics: Micromax extends some handsome dealer margins to the market. Where on one hand Nokia pays a meager 2% to its partners (out of which 1% goes away in discounts), Micromax extends somewhere 5%, leading to greater channel partner satisfaction. It also extends extra margin to distributors willing to hold its product in their inventory. Also, under its distribution model, it offers marginal short-term credit or no credit to its distributors, with most of its distributors paying for its products at the time they accept delivery. In order to effectively manage its inventory, it obtains daily inventory and sales reports from its state and regional distributors detailing the location and models sold, and endeavors to maintain an optimal level of inventory. On the other hand, it avails handsome credit period from its outsourced manufacturing partners, extending from 30 to nearly 60 days, thus allowing itself sufficient cash flow to

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manage its operations in a cost effective manner and realize the time value of effective money. Marketing and Sales: Promotion of the product through sales, advertising, public relations and direct marketing is a very important aspect of the marketing mix. As we all know, Advertising is the biggest tool for development of integrated marketing biggest communication (IMC). IMC is the practice of unifying all marketing communication tools in order to send a concise and persuasive message promoting company goals. Micromax has very effectively used television, print, events and web media of television, advertising to communicate with the customers. The Micromax Fly to Brazil Teaser after the huge success of Fear Factors Khatron Ke Khiladi Season 1 and 2, Micromax became Associate Sponsor for the 3rd season hosted by leading bollywood actress, Priyanka Chopra. Apart from that, Micromax has been spending heavily on cricket tournaments. It took part in sponsoring IPL matches during 2010 season. Whats most important is that Micromax understands its target customers very well and it et knows that every penny that it spends on cricket, the game that connects every Indian, is worth more than a dollar. IIFA, one of the biggest names across the Indian Entertainment industry. Micromax was the official sponsor o the prestigious IIFA Awards, 2010. This was done with of the aim to capture the gaze of potential consumers and to enrich the brand visibility in the Sri Lankan & the global market. The company came up with a campaign where 6 lucky Micromax customers would get to fly to Sri Lanka for Micromax awards and would be treated as celebrity. Later, Micromax unveiled an all exclusive IIFA edition of Micromax Q55 Bling.

Aspirational campaign IIFA teaser al

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All exclusive IIFA phone Bling

Micromaxs brand positioning is driven by the following factors Innovative, Youthful, Real and Aspirational. Service: As mentioned earlier above, all of Micromaxs After Sales Service Centers (ASCs) are owned and operated by third parties, with whom Micromax contracts. Over the last 3 years, Micromax has created more than 370 strategically located ASCs and 5 modular service centers. All ASCs are continuously monitored by in-house technical regional service coordinators. Besides that, they also have a service factory in New Delhi that provides comprehensive range of services, including chipset and PCB replacement services. It also has technical regional service coordinators who regularly audit ASCs country-wide and seek feedback from customers and distributors on after sales services being provided. d. HOW SUSTAINABLE IS IT? We are not the poor cousins of Nokia, says Vikas Jain founder of Micromax Mobile. This is the attitude that has brought them this far and will take them further. Micromaxs strength to appropriately identify and cater to the needs of customers (battery life, qwerty keypad, Dual SIM etc.) in the most effective way is what has made them succeed this far and will continue doing that. It is on top position in Indian telecom space with 80% growth in rural areas while Nokias market share has been dipping. Micromax, according to IDC, has a 8.1 percent market share in India and is now valued at over $1 billion. Micromaxs growth is very reasons/factors/predictions: much sustainable, owing to the following

Per The McKinsey Report (The Bird of Gold The Rise of Indias Consumer Market May 2007 report), it is predicted that if India continued on its current growth path, income levels would nearly triple from 2005 to 2025, over 291 million people would move from poverty to a more sustainable life over these two decades, countrys middle class would swell by nearly 10 times, India would climb from being 12th largest consumer market in 2005 to worlds 5th largest consumer market in 2025. This is because of huge population growth which is expected to reach 1.40 billion by 2026. It is also expected that India would have an excellent population demographics wherein most of its population would fall with 15-59 years of age. Urbanization levels are expected to reach approximately 31% by 2015 and 38% by 2026. Increasing Consumption - The combination of rapidly rising household incomes and a robustly growing population will lead to a significant increase in overall consumer
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spending. The McKinsey Report forecasts that aggregate consumption in India will grow in real terms from ` 17 trillion in 2007 to ` 34 trillion by 2015 and ` 70 trillion by 2025, a fourfold increase. Increased Discretionary Spending Communications Spending to Grow Fast - The largest categories of Indian spending were food, beverages and tobacco (FB&T), transportation and housing. By 2025, FB&T will still be the largest category, although its share of average household consumption is expected to drop from 42% to 25%. Communications, which accounted for only 2% of average household consumption in 2005 with a market size of Rs 344 billion, will be one of the fastest expanding categories with growth of over 13% per year taking the market size to Rs 4,288 billion by 2025. (Source: The McKinsey Report) The overall wireless teledensity in India has increased from 24.95% for the quarter ended June 30, 2008 to 49.60% for the quarter ended March 31, 2010 (source TRAI). TRAI estimates that urban mobile teledensity will reach 125% by March 2014, with urban mobile subscribers reaching 572 million, and that the rural mobile teledensity will reach 60% by March 2014, with rural mobile subscribers reaching 468 million. According to Analysys Mason, the Indian mobile handset market is expected to grow from a total of 151 million handsets for the twelve month period ended December 31, 2009 to 402 million handsets for the twelve month period ended December 31, 2014. The medium ASP segment is likely to be the fastest growing with volumes increasing from 68 million handsets for the twelve month period ended December 31, 2009 to 240 million handsets for the twelve month period ended December 31, 2014 and overall contribution increasing from 45.03% to 59.85% of total mobile handset market in India. The medium ASP segment is expected to grow at a CAGR of 26.07% between the twelve month period ended December 31, 2010 and the twelve month period ended December 31, 2014 with the overall Indian Mobile Handset market registering a CAGR of 20.93%. All these factors/predictions indicate that there is still a huge market un-tapped and there is a lot more coming up. Surely, demand influx is going to be much more than supply unless companies like Micromax are able to reasonably forecast the market potential continuously going forward and are able to stick around and deliver high quality products one after the other. Theres a lot that such companies can make out of the future predicted growth, not only for themselves, but for the society, for the government, for the economy and also, for generations to come!

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