India could have lost 40 million mobile phone connections

India's position as the world's fastest growing market for smartphones could take a major hit if the administration continues to keep both the phones and spare parts off the list of essential supplies during the lockdown period. An association representing electronics and mobile phone industry says as many as 40 million subscribers could be left without a functioning device.

Ironically, this sobering bit of market analysis comes alongside a report suggesting a 4% year-on-year growth in the Indian smartphone market during the first quarter of 2020. Market research firm Counterpoint says more than 31 million units were sold between January and February though post-Covid-19 outbreak sales fell 19%.

The India Cellular and Electronics Association (ICEA), which represents manufacturers, brand owners, technology providers, VAS application and solution providers, distributors and retailers of mobile handsets and other electronic devices, believes that if by end-May, the restrictions on delivering handsets and spares continue, cell phone services would be hit.

The smartphone repair market in India has witnessed multi-brand options with the likes of Mobigarage and Yaantra seeking to disrupt the proceedings with doorstep servicing. However, since the midnight of March 25, all such services have been put on hold following the total lockdown imposed by the federal government.

The total lockdown has forced even mobile phone manufacturers to stay idle in spite of the fact that companies such as Samsung and Google are offering even free repair of smartphones worth $300 in countries like the United States so that emergency workers aren't inconvenienced.

The ICEA estimates that more than 25 million customers are estimated to be saddled with non-functional or semi-functional devices due to non-available of components in the supply chain. If the government does not include phones, laptops and spare parts in the list of essential items soon, things could only get worse, the body warns through a media statement.

The ICEA, which includes big names in the mobile industry including Apple and Xiaomi, estimates the current active mobile phone population in India to be in excess of 850 million and an approximate breakdown rate of 0.25% a month. These people do not have the option of either fixing their phones or buying a new one, the association has said.

The Counterpoint report also highlights a 10% shrinkage of the Indian mobile phone market during the rest of 2020 though it expects the major players to retain their market share. Xiaomi leads the race with 30% followed by Vivo and Samsung. The report says Apple grew by 78% during the first quarter to corner 55% of the premium market segment.

So, what's the solution now?

The industry association has petitioned the federal government led by Narendra Modi to bring mobile phones into the list of essential goods.

“We have written to the government that these numbers will expand to nearly 4 crores before the end of May. It is critical that mobile device sales via online, and in a phased manner via retail, as well as service centres with facilities for home delivery and pickup must be declared as “essential services”, in addition to grocery and medicines,” says ICEA Chairman Pankaj Mohindroo.

The association also sought to know how some of the states would ensure that smartphone users mandatorily download and carry the government's Covid-19 tracking app Aarogya Setu. "How would they use the app and how can government collect data if the smartphones aren't in working order," an official of the ICEA asked.

The latest on the matter is that following ICEA's representation to its nodal government department - the Ministry of Electronics and Information Technology - officials of this department have sent a strong recommendation to the federal ministry for internal affairs to include smartphones and laptops into the list of essential goods.

Of course, there hasn't been any movement from the federal government on this front and ICEA is hoping that there could be some relaxation when the lockdown reviews begin this week.