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HindustanTimes Sun,31 Aug 2014

Homegrown mobile phone makers bite big chunks off global giants

M Rajendran, Hindustan Times  New Delhi, April 26, 2014
First Published: 00:16 IST(26/4/2014) | Last Updated: 00:22 IST(26/4/2014)

They were three regular middle class guys, with dreams in their eyes, ambition in their bellies and belief in themselves. By identifying and riding the opportunities thrown up by India’s booming telecom market, they challenged the stranglehold of MNCs in mobile handsets and today count among the market leaders in India.

Rahul Sharma (37), Pradeep Jain (44) and Hari Om Rai (47) cut their teeth in the cut-throat Indian mobile handsets market as distributors of established brands and rapidly worked their way up the value chain.

Between them, Sharma, co-founder of Micromax, Jain, founder of Karbonn Mobile and Rai, founder of Lava International, control a third of India’s smart phone market. Micromax is the clear No. 2, behind Samsung, having recently overtaken Nokia.

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Incidentally, all three have left their buy-from-China-and-sell-in-India philosophy behind. All three have consciously set up in-house technical and design centres in India to develop technologies that their Chinese and Taiwanese vendors than execute. This allows them to take on MNCs that have deeper pockets.

Early in his career, Sharma, son of a Delhi school principal, who grew up in the middle class Teacher’s Colony in the Capital, realised during a bus ride in Narasinghpur (Gurgaon) that he wanted to do something on his own.

Together with three friends, he began dabbling in software in 1999, developing programs for small companies. Slowly, they moved up the value chain and a few years later, began developing software for Nokia’s fixed wireless phones.

This marked their entry into the telecom industry. The first order was for Rs. 10 crore, a huge sum for Sharma and his friends at the time. Incidentally, many of his old friends and associates still have his phone number saved as “Rahul Nokia”.

On a trip to Kolkata in 2007, he found some PCO owners on the outskirts of the city using truck batteries to charge their mobile phones.

“I saw an opportunity here for a phone with extra-long battery life,” he said. It took him some time to convince his partners that there was a market for such a phone. But in the end, another Micromax co-founder Sumeet Arora, who had done research in this area for his previous employer, developed a phone that consumed less power.

They found a Chinese vendor who was willing to assemble 10,000 units of the phone for them, but selling was another matter. “The dealers who would welcome us when we went to hawk Nokia phones were non-committal about the Micromax phones,” said Sharma.

Those were difficult days. Finally, a few vendors in rural areas agreed to stock their phones. “All 10,000 phones sold out in 10 days. We got repeat orders and Micromax was on its way,” he said.

“We never followed the ‘me too’ philosophy. We understand customers, and also how to make a good mobile phone,” said Sharma, who now lives in a plush farmhouse in Mehrauli and owns a Bentley, a Mercedes and a BMW.  

Like Sharma, Jain, too, began life as a distributor. “I was happy with a turnover of `100-200 crore from the distributorship. But I got into mobile phone making only after I realised the huge potential in India.”


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