Various industries are feeling the heat following government’s decision of demonitization of currency and the mobile phone market is no exception. Following a 50% drop in daily revenue, Indian handset makers have proposed the government to allow customers to buy mobile phones with the old Rs 500 and Rs 1,000 notes, according to a latest report from Economic Times.
The handset makers have sent a proposal to the telecom, IT and finance ministries suggesting that sales can be made against valid Aadhaar cards or voter cards, and each device sold can be traced via IMEI (International Mobile Equipment Identity) number, to avoid misuse. The 50% drop in daily revenue of mobile phones translates to Rs 175-200 crore, added the report. The reason for the slump is mainly via brick and mortar channel, which contributes to more than 85% of the industry’s turnover.
The Indian Cellular Association said in a letter to Finance Minister Arun Jaitley,
This will also provide a trigger for further purchase of smartphones and feature phones to transition to digital payment platforms. In turn, this will ease the pressure on cash transactions.
An IDC report last week stated that cash is a dominant mode of transaction in the devices market as it enables quick transaction turnaround thus providing much needed liquidity for maintaining the demand and supply mix in the devices business. Indian handset makers like Micromax and Intex said they would have to consider lowering local production to avoid inventory pile ups if liquidity crunch continues.