Nokia, the world's largest handset maker, is investing
up to $150m (£78m) over the next four years to establish a
manufacturing facility in India.
Upon completion, the plant is expected to employ about 2,000
people and be used to manufacture the full range of Nokia's
handsets for both GSM and CDMA (Code Division Multiple Access)
technologies, the company said. The handsets could retail both in
India and in neighbouring countries, it said.
Nokia is still evaluating the investment to determine, among
other things, the plant's size. The company expects to finalise its
plans during the first quarter of 2005. The first handsets from the
Indian facility should be rolled out by the end of 2005 or early in
2006, the company said.
Nokia's share of the handset market eroded over the past year as
rivals such as Sony Ericsson Mobile Communications and Motorola
worked to improve their handsets and lower prices. Nokia is working
aggressively to counter the increased competition and pinned much
of its hopes for growth on opportunities in emerging markets such
as India, Brazil and Russia.
The company currently invests in India. In April it announced
work on a CDMA research and development facility in Mumbai. And
Nokia is already negotiating with component suppliers for its new
Indian facility, as well as talking to regional operators about
marketing and distributing the handsets.
The anticipated boom in Indian mobile telephony attracted other
companies to set up manufacturing operations in the country.
Ericsson in Stockholm, for example, said it plans to make radio
base stations in India.
India recorded about 41 million mobile phone subscribers in
August this year, according to the Telecom Regulatory Authority of
India in Delhi. The figure could reach 100 million by 2006 and 200
million by 2008, Carl-Henric Svanberg, Ericsson's chief executive
officer and president, said recently in Delhi.
The total number of mobile subscribers worldwide will hit two
billion by the end of 2006, according to Nokia's forecasts. It
predicts that India will make up almost 12% of that figure.
Separately this week, an executive at Microsoft said that the
software maker is also setting up a research lab in Bangalore,
India, that will focus on areas including computing technologies
for emerging markets.
India is seen as offering several advantages to large
corporations, in terms of sales opportunities in the region and
relatively low labour costs.
Laura Rohde and John Ribeiro write for IDG News
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