Nokia slashed prices across models by 5-16 per cent following the duty cuts announced in the mini-Budget.

In absolute terms, the cut in prices ranged between Rs 200-1,700 across all the models. The price of the entry-level model, 3315, is reduced to Rs 3,710 from Rs 4,000.

The cut was steeper in the high-end handsets -- 9210i, 6600, 7250i and 6100. While in most of the handsets the cut was around five per cent, in the new 1100 model, it was as high as 14 per cent, and in 6100 13.97 per cent.

Pankaj Mahindroo, president of Indian Cellular Association, said by next month street prices in some parts of India would be lowest in Asia.

But prices in Kerala, Bihar, Jharkhand, North-east, Orissa, Maharashtra, Gujarat, Punjab, Tamil Nadu and Karanataka would remain higher as the sales tax and octroi in these states are higher at 7-15 per cent and 3-3.5 per cent respectively.

Prices in New Delhi, West Bengal, Uttar Pradesh, Haryana and Rajasthan would be among the lowest.

Mahindroo said over the next three weeks other handset manufacturers would also follow suit as it was the ICA policy to pass on duty cuts to consumers within four weeks. He said that prices would come down by 7-8 per cent on average.

According to ICA projections, sales of tax-paid handsets in 2004 would be 25-26 million compared with 12 million in 2003.

The current price cuts are likely to result in a wider subscriber base for the cellular companies. Mahindroo backed his associations projections by saying that higher sales in handsets would also be driven by rising industry confidence. "India is on its way to have the second largest subscriber base in the world by 2007."