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India unveils 'people's phone' for £10

15 февраля 2008

India has already built the world's cheapest car – the £1,250 Tata Nano – now the country has unveiled the telecoms equivalent: the £10 "people's phone".

The mobile handset, developed by Spice, the Indian telecoms group that is listed in Bombay and worth £1 billion, is angled at the very lowest end of the market.

This means the phone has jettisoned all "non-essential" features – such as a screen. "It is just a phone," said Bhupendra Kumar Modi, the Spice chairman, who hopes to sell about 10 million in the next year.

Mobile phones priced under about £20 account for only about a fifth of the global market.

However, with half the world's population yet to make a phone call and Western markets becoming saturated, there are more mobiles than people in the UK, companies see massive potential in budget devices aimed at the developing world.

The telecoms industry expects the number of people owning a mobile phone to grow from 3 billion to at least 4 billion over the next three years.

With the "people's phone", Spice is joining the race to sell handsets to the up-and-coming new generation of Asian, African and South American consumers dubbed "the next billion".

The company will begin selling its people's phone in Asian markets from next month. Spice has already suggested prices can be stripped down further and that a £5 mobile is not far away.

Cheap products from India are already making waves around the globe, though British shoppers are likely to have to wait to feel the ripples.

Since the Nano, the world's cheapest automobile, was unveiled last month, its manufacturer, Tata, has been inundated with queries from non-Indians asking whether they can buy "the people's car".

The 33bhp two-cylinder vehicle is priced at 1 lakh (or 100,000 rupees, about 1,250 pounds), excluding taxes. The base model will cost about 130,000 rupees on the road - a sum that would buy a stereo system for a BMW.

Tata says it will export the Nano to the UK and other overseas markets eventually – but not for about three years.

Meanwhile, India, the world's fastest-growing market for mobile phones is a prime target for mobile manufacturers.

It is estimated that more than 870 million of India's 1.1 billion population are yet to own a phone. Mobile subscribers in the country are expected to more than double in the next three years, to 500 million.

The remainder of the "next billion" are not being overlooked. Nokia, the world's largest manufacturer, is experimenting with cheap handsets that can be used for mobile banking in Africa. Motorola, its American rival, has showed off a bicycle-powered device, which it suggested could sell well in China.

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