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. Last Updated: 07/27/2016

Alcatel Seals Supply Deal with Yevroset

French mobile phone maker Alcatel announced a supply deal with retailer Yevroset on Monday that could help it to more than double its presence in the country's lucrative mobile phone market.

The linkup with Yevroset is expected to expand Alcatel's market share to 2 percent to 3 percent from the current 0.5 percent by the end of the year, said Berengere Dutuel, the company's director for Russia and the CIS.

"We are talking not just about Russia, where Yevroset is the undisputable lead retailer," Dutuel said. "We want to capitalize on Yevroset's huge market share in Belarus, Ukraine and Kazakhstan as well."

Alcatel will target low-income groups with its economic T&A Mobile Phones handsets, Dutuel said.

"We never produce handsets that cost more than 5,000 rubles ($200)," Dutuel said. "These cheap but efficient handsets are market leaders in developing countries in Latin America, Asia and Africa."

Under the terms of the agreement, Yevroset will sell six models of Alcatel handsets, including the OT-E101, which costs just 1,100 rubles ($44) and is aimed at first-time buyers and students with modest means. Yevroset also gained exclusive rights to retail Alcatel's new Elle GlamPhone, which has been designed specifically to target the female market.

Yevroset president Alexei Chuikin on Monday expressed confidence that Alcatel's new products would "give Russians the best choice at the best price."

The agreement does not represent Alcatel's first foray into the local market or its first dealings with Yevroset, however.

In 2004, Alcatel set up a joint venture with Chinese electronics manufacturer TCL Communication, called TCL & Alcatel Mobile Phones, which has since been supplying cheap handsets to Russian retailers, including Yevroset.

Yevroset stopped selling Alcatel handsets in 2005 because there was no contract to receive supplies directly from the manufacturer, CEO Yevgeny Chichvarkin said at the time.

Since then, rival retail outlets Svyaznoi, Betalink and ElDorado have sold Alcatel's handsets.

But Yevroset's commanding presence in the mobile phone retail sector, estimated by J'son & Partners to stand at 40 percent, means Alcatel's market reach will be greatly enhanced.

Eldar Murtazin, editor of Mobile-Review.com, said the agreement with Yevroset would fill a gap in a largely underexploited segment.

"Since BenQ-Siemens [mobile communications firm] left the Russian market, there are practically no cheap handsets left," Murtazin said. "While Alcatel cannot count on an immediate surge in sales, it can nonetheless expand its market share by about 3 percent thanks to the new partnership."

Sergei Savin, a telecoms analyst at J'son & Partners, agreed that Alcatel could stand to benefit in the partnership.

"Yevroset has consistently demonstrated it can guarantee an acceptable level of handset sales in the country," Savin said. "In fact, many handset manufacturers and suppliers continue to have a grip on the market thanks to Yevroset."