Indian Mobile Brands Complain That GSMA Favoured Chinese Companies

Indian mobile makers have alleged that GSMA gave Chinese brands an undue advantage by exempting a particular fee.

Indian mobile brands have suffered at the hands of their Chinese counterparts, who’ve provided consumers with quality products and made merry.

Companies like Micromax and Lava have repeatedly pointed out demonetisation and emergence of 4G as the reason for their premature fall but this week, these brands have found another reason to work their failure around.

According to a report in The Economic Times, GSMA, the telecom body has shown bias in favour of Chinese brands, which had a direct impact on the business of Indian mobile manufacturers.

The telecom lobby group has reportedly given special leeway on crucial code allocation fee for the Chinese brands, while Indian players were paying the full fee. Brands which includes Micromax, Lava, Celkon, Datawind and Karbonn among others, are seeking a refund of over $6 million (Rs 35 crore approx) for payments made between 2011 and 2017.

This is the period, according to the companies, when Chinese firms were exempted from paying fees for Type Allocation Code (TAC), which is basically the first eight digits of the International Mobile Equipment Identity or IMEI number of a mobile handset.

The report says that current TAC fee is set at $400 (Rs 28,000 approx) for each device. Indian brands allege that Chinese companies have been exempted from paying this fee for the said period, which goes against the anti-trust laws of the GSMA.

Removing these fees is likely to have helped the likes of Xiaomi and Gionee among others to absorb the device cost and sell at an affordable price point to the end consumer.

This formula is the big reason behind Xiaomi’s growth to become one of the leading brands in the Indian mobile space, while no Indian mobile manufacturer gets a mention in the top five with respect to their market share.

Indian companies are now hoping the government to intervene and take the matter in its own hand and give them a solution for this issue.

There are many ways to look at the overall situation. It’s after all the Indian mobile brands who introduced Chinese mobile vendors to the Indian consumers. These vendors, closely studying what the people wanted, made use of their extensive manufacturing back-end and industry know-how to one-up their Indian counterparts.

And it’s not as if Indian brands were the only ones to suffer from the Chinese invasion. Samsung, which benefited from the demise of Nokia and BlackBerry, also had to bear the brunt of the growth achieved by Xiaomi in India.