Micromax Mobile Advantage
Image: Madhu Kapparat for Forbes India
our years after it was first recommended, mobile number portability still remains a paper concept. Yet for over nine months, Saurabh Raina, a 43-year-old employee with a switchgear manufacturer from Bhopal, is choosing the best monthly plans on offer across six different GSM operators while he can be reached on the same number he has had for over seven years.
The key lies inside his mobile phone — a full-keyboard (QWERTY) model called the “Q3” that supports two active GSM SIM cards at the same time. One of these he keeps constant as his “incoming number” to receive calls, while the other, he changes at will depending on which operator offers him the best tariffs.
This “dual-SIM” feature is today present in 20 to 30 percent of all mobile handsets sold in India, estimate experts. Yet market leader Nokia does not have a single dual-SIM handset in its vast repertoire of phone models for India. And the company that made Raina’s Q3 — Micromax Mobiles — offers this feature on 22 out of the 26 phone models it sells in India. The Q3 itself, though fancy looking, costs only Rs. 3,700.
Micromax is now India’s third-largest GSM mobile phone vendor with a market share of 6 percent after Nokia (62 percent) and Samsung (8 percent), according to research firm IDC. It sells anywhere from 700,000 to one million mobile phones every month. And by its own estimates it is now selling nearly Rs.1,500 crore worth of phones annually.
“We are not the poor cousins of Nokia,” says Vikas Jain, one of the four friends who together started and grew Micromax to its present position. “Instead we will force Nokia to launch newer products to compete with us.”
The guys at Micromax have two aces up their sleeve — a keen eye for what the customer needs, and the ability to swing their supply chain.
Though the company started making mobile phones only in 2008, it was founded in 1991 by Rajesh Agarwal as a distributor of computer hardware for brands like Dell, HP and Sony. In 1999 three of his friends — Sumeet Arora, Rahul Sharma and Vikas Jain — joined him as equal partners in the company.
Agarwal, the eldest of the four, keeps a handle on the company’s finances. The quieter Arora, a “class topper”, is the company’s chief technology officer. Jain manages Micromax’s alliances and partnerships with other companies. And the tall and fashionable Sharma is the risk taker with the big ideas.
It was Sharma who convinced the others, after nine years of selling computers, software courses and “fixed wireless” public phones (PCOs), to enter the crowded mobile phone market. The company’s first phone, the X1i, was born from the realisation that many Indian villages and towns didn’t get enough electricity to even recharge a phone daily.
Catering to a Need
By increasing the size of the battery to 1800 mAh, Micromax was able to tout a standby time of 30 days for the X1i. And at the rather affordable price of Rs. 2,150, the phone was a big success in rural India.
The unexpected success of Micromax’s first mobile phone taught the four friends two key lessons. One, “If you give people something that helps them in their day to day lives, they will buy it,” says Sharma. Two, even though there were over 50 companies selling mobile phones in India, with Nokia alone dominating over 60 percent of the market, there were features, niches and categories that could be carved out by a new entrant.
“We knew that competing on price along with Nokia, Samsung or LG would not get us anywhere. Instead we wanted to create, and own, categories,” says Agarwal.
The friends realised that intense competition among mobile operators for subscribers would inevitably lead to multiple connections per user. But carrying two phones around in your pockets wasn’t something most people fancied.