Friday, Dec 03, 2004
Motorola plans manufacturing base
By Sandeep Dikshit
NEW DELHI, DEC. 2. India appears poised to become a manufacturing base for telecom equipment six years after some of the major multinational corporations had scaled down their operations. The American giant, Motorola, has become the latest MNC to express interest in setting up a plant in India during meetings between its top officials and the Union Cabinet Ministers today, said high level official sources.
Motorola is planning to manufacture mobile handsets and switches as against just handset manufacturing planned by the Korean LG, Finnish Nokia and another MNC Elcoteq. In addition, the French telecom company, Alcatel, has signed a transfer of technology agreement with ITI for the manufacturing of base transceiver stations, base switching stations and main switching centres. "The Swedish company Ericsson is also interested and has held talks with Communications Ministry officials,'' said the official.
So far, almost 99 per cent of the telecom equipment including handsets, terminals and switches were being imported. "These companies have been attracted by the big volumes in the telecom market and the Government's response has helped firm up their plans. We have been quietly persuading them to come to India,'' said the official.
LG has decided to set up a unit in Pune, Maharashtra, and it will start functioning from January next. It will produce 20 lakh GSM technology-based mobile phones in the first year, ramping up production to 40 lakh GSM and CDMA technology based mobile phones in 2006. Nokia is yet to select the site but plans to produce the first India-made phone by the end of 2005 or early the next year. Its officials declined to spell out the plant size or the planned production volumes.
MNCs had entered the manufacturing sector in a big way in 1991-92 after India opened the telecom sector to private competition. Several major MNCs including Lucent (then AT & T), Ericsson and Alcatel had set up plans in joint venture with Indian companies to manufacture digital switches. However, the companies soon became tired of the delays by the then monopoly operator, DoT (Department of Telecommunications), in placing orders and scaled down their operations. They decided to wait for a couple of years to asses whether the ongoing boom in demand for telecom services was for real before deciding to take the plunge.
Copyright © 2004, The Hindu.