Following the announcement of the development of a £10 mobile handset* in India, Chris Williams, Telecoms Partner at Deloitte comments:

"The lower the price of a mobile handset goes, the greater the addressable market becomes. Over 80 percent of the world's population live within coverage of a mobile network, but half of these live on $2 a day. For this latter group, low-cost handsets could become an essential tool to increase earnings simply to the level of making a living.

"Emerging economies represent a sizeable opportunity. Vendors should note that demand may be stronger in rural areas, where consumers are likely to welcome any device at an appropriately low price. In contrast, in urban areas, consumers may aspire to higher-end phones, partly as a means of demonstrating their increasing wealth. It is important to remember that phones are consumer items, and branding could be as significant a factor as cost. Indeed there are a number of markets where consumers choose to buy second hand high end phones, rather than choose cheaper brand new models.

"But serving rural communities in the developing world, particularly at a retail level, is likely to pose a considerable challenge for companies used to the sophisticated supply chain of the west. It will be a challenge to get their products to India's 700 million rural population, while still keeping retail prices accessible." 

Ends

Notes for editors
www.spicetelecom.co.in

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.