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India to ban replica handsets from China

India is moving to block millions of cheap copy-cat Chinese mobile phones and accessories from flooding the market that the handset industry describes as “time bombs” for their often dangerously poor quality.

“You have many of these phones behaving like little bombs – just exploding because the battery is bad,” said Pankaj Mohindroo, national president of the Indian Cellular Association, the lobby group representing Nokia and other large handset makers in the country.

The ICA estimates that of the 4m-5m handsets imported each month from China up to one third, or 1m-1.5m, are cheap replicas produced by small shops in southern China.

Many of these include poor quality accessories and components, such as fake batteries, that can blow up on users.

The ICA says that many of the phones also do not have an “international mobile equipment identity” number, an in-built code allowing handsets to be traced to prevent their use by terrorists or other illegal groups.

The Indian government last week moved to ban Chinese phones that do not carry the number. Analysts said that besides security concerns, pressure from the big handset brands such as Nokia was also a driver behind the ban.

According to analyst estimates, 40 per cent of Chinese replica or “whitebox handset” shipments are exported, and India has become their biggest overseas market.

The issue comes as India’s emergence as one of the biggest and fastest growing mobile markets – with about 10m subscribers being added every month – has fuelled its ambition of becoming a global base for the manufacture of handsets.

Gartner, the research company, estimates India will have more than 771m mobile connections by 2013 from an estimated 452m this year, implying annual compound growth of 14.3 per cent.

The ICA is seeking to increase the country’s handset manufacturing capacity from more than 104.5m in 2008, which was up 25 per cent over a year earlier, to about 250m by 2012, which would make India the world’s second largest manufacturer of the units after China.

Nokia has set up its largest manufacturing facility in the world by employee numbers in Chennai, southern India, with 8,000 people.

Mobile handset sales in India in the fiscal year ending March were worth Rs259bn ($5.3bn), up 7.9 per cent, of which Nokia accounted for about two-thirds of market share.

Источник: Financial Times

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