New Delhi: Prices of mobile handsets marketed by home-grown companies are set to increase by up to 10% due to a depreciating rupee, which has declined by about 10% in the last three months.
“The value of rupee has depreciated by almost 10%. Almost all companies are about to run out of their stocks which they had booked months in advance.
“The margins in handset business are very low and companies will have to increase price of their handsets,” national president of Indian Cellular Association (ICA) Pankaj Mohindroo told the news agency.
iPhones are displayed at a mobile phone stall. Photo: Reuters
He added that companies are expected to increase prices in the range of 5-10%.
Echoing sentiments, Karbonn Mobiles executive director Shashin Devsare said that his company is also looking at increasing the prices in the range of 7 -10% across all its handsets.
“Despite the continuous fall of rupee against dollar in the past few months, Karbonn has absorbed the burden but now it is increasingly becoming difficult to retain same price levels,” he said.
However, foreign companies manufacturing mobile handset in India are indicated they are evaluating the situation.
“As on date, there is no decision to increase price but we are watching the situation closely,” Samsung spokesperson said.
Korean mobile firm LG said that it will not increase price of its handsets in near future, while market leader Nokia remained silent on query of price rise.
Rupee has fallen to almost 50 against a dollar on from the level of around 44 in July, mainly due to increasing demand for dollars by foreign institutional investors and oil companies. Besides, economic crisis in Europe and looming slowdown in world economy are other responsible factors for the rupee devaluation.
In addition to weakening of rupee, the Karbonn Mobiles executive director said, various states across India are levying different value added tax (VAT) for mobile phones, adding an additional burden on consumers.
The ICA is the apex body of the mobile industry comprising manufacturers, brand owners, application and solution providers, distributors, retailers and eminent consumers of mobile handsets.
The members of ICA include mobile phone industry players like Nokia, Samsung, Motorola, Sony Ericsson, LG, Blackberry, Micromax, Lava, Zen and others.