Why did Philips enter the cell-phone and pager market at a time when the other players like Nokia, Motorala, Ericson had already established themselves?

They did enter the business much before we did. Philips focus on consumer communications came much later in 1996. We are in process of building a brand equity in this segment inIndia. But we are sure that by the year 2000 Philips will be among the top three players in cell-phone industry.

How do you plan to achieve the target?

We plan to launch a cell-phone every quarter in order to offer a wide variety to the customer. Apart from this, we also have a unique after sales service called the `First Choice Service' which is unparalleled by our competitor. In this service, if a subscriber faces a problem with a Philips phone, he just to gives a call to our service centre instead of going to the dealer or the operator. If needed we replace the phone within 24-hours. For the delivery we have a tie-up with DHL, a courier service. Globally, we have the `First Choice Global Exchange Service' where a Philips phone is changed in any part of the globe.

You have four cell-phone models at present out of which to are low-end. In which price segment do you plan to place your future models?

The market demand in India is for mid-end products. Our future models will mainly targetthe this segment though we may enter in other segments also.

You plan to launch a phone every quarter. How do you plan to market and advertise your cell-phones?

The plan to market our cell-phones through the operators. We are supplying to Essar, Escotel. We have several packages associated with our phones like the `Just Talk' package through Essar in which the phone already has a sim card. The customer can use it immediately on purchase and can get registered later. In future we may also look for more operators and more attractive packages through them. We certainly plan to be more aggressive in our marketing. We have already made our presence felt in Punjab, Kerala, Karnataka.

Our advertisement campaign is not restricted to the media but we are also doing many below the line activities like road shows, sponsoring events etc. We feel that advertising on its own is not enough but we have to work with operators to make the product popular.

Any plans of Philips Consumer Communications enteringany other product segment?

We have a huge product range internationally, but it all depends on the market requirements. In future we may enter into corded and cordless phones segment. For this, we do not have any manufacturing plans but for corded phones we will have local assembly unit since the regulations require that. For cordless phones we will have to enter into a joint venture with Philips or any other company.

How do you view Indian market in the years to come?

India has a potential market. The country has lot of subscribers waiting to be tapped together with the operators. This industry will have a good growth in the coming three to five years. But the excise duty should be brought down from the present level of 53 per cent to increase the market and make the product more affordable.

Is grey market a threat to Philips cell-phones?

The grey market does not affect us as high-end products are available there. The market in India is for mid-end products. Moreover, theoperators offer packages like free air time, which a customer does not get in the grey market. If operators stop subsidising on phones then grey market will play a greater role.

Does Philips has any manufacturing plans in India?

Currently, we do not have any concrete plans. All depends on the volumes. With a low volume it is not economical to set up a manufacturing base. Our supplies to India comes from Singapore where we have a regional factory.