Bangalore continues to remain the darling of telecom software and R&D
companies and is ahead of Chennai and other locations. Texas Instruments,
Motorola, Cisco, Nortel are some of the companies that chose Bangalore over
other cities. Even Chinese vendor Huawei, a relatively new entrant into the
Indian market chose Bangalore for its R&D center. It has, meanwhile, already
identified its hardware manufacturing facility close to Bangalore and is waiting
for the necessary government approval to start the construction of the plant.
Hyderabad appears to be losing out to Bangalore and Chennai. The location
preference of the companies announcing the setting up of their facilities in
India can be gauged from the fact that out of 19 committed FDI investments for
the year 2005-2006, Hyderabad got just two projects- semiconductor
manufacturing by SemIndia and ATMP facility by Tessolve. However, XL Telecom (in
partnership with Kyocera, Axesstel Inc, and Corning) that has been in Hyderabad
since 1985 also manufactures CDMA mobile phones, fixed wireless desktop phones
and terminals, and switch mode power systems.
Elcoteq and Flextronics are among some of the leading names that opted for
Bangalore. BPL, being traditionally from this city, also has a handset
manufacturing facility here. EMC2 and Intel have set up their storage technology
software development facility and R&D facility respectively.
| ITI:
The First Mover |
| ITI has been
the sole face of Indian telecom manufacturing in India. It set up its
first manufacturing facility in Bangalore in 1948. A vast range of telecom
products manufactured here included digital switches, digital microwave
equipment, optic fiber equipment
ITI also set up one of its units in
Pallakad in Kerala in collaboration with the French giant Alcatel in 1976.
The plant manufactures large digital switches and digital trunk exchanges.
It has modern facility for PCB manufacturing
ITI also set up three units in Uttar
Pradesh at Naini (near Allahabad), Rae Bareilly, and Mankapur. There is
one manufacturing facility in Srinagar in the state of Jammu &
Kashmir, which is engaged in component manufacturing. This plant has
upgraded its facilities for assembly and testing of fixed telephones
The Mankapur and Rae Bareilly units got a
major boost when in 2005, Alcatel and ITI together launched new GSM
production facilities to manufacture base stations. The production will
primarily cater to the expansion plan of BSNL's network
The present UPA government has taken all
steps to revive the company and expand its manufacturing portfolio with
help from Alcatel. |
Chennai leads the pack with 9 projects (thanks to Nokia, Alcatel, Aspcomomp,
Flextronics, Cisco, Foxconn, Ericsson, and Motorola) on the manufacturing side.
On the R&D side, Telcordia Labs and Extreme Networks are two leading names.
Other locations that have benefited include Jaipur (Ericsson has set up a base
station manufacturing unit).
Maharashtra has been a big disappointment in terms of attracting new
investors for telecom manufacturing. Till now, only LG has set up a factory to
manufacture GSM handsets in Ranjangaon, near Pune. Also, Jabil Circuit (through
the acquisition of Celetronix, an EMS company) is present in Mumbai.
Despite being the financial capital of India, Mumbai has not been able to
impress global telecom vendors or contract manufacturers. The blame squarely
lies on the Maharashtra government's failure to present a good business case
to telecom companies planning to come to India. Part of the blame can also be
attributed to some of the unfortunate incidents such as flooding and bomb
blasts, which sent out wrong signals to potential investors.
The Haryana government managed to convince Samsung to set up its handset
manufacturing facility at Manesar, near Gurgaon; while Ericsson set up its GSM
base station facility in Jaipur. Uttar Pradesh's Rae Bareilly and Mankapur
continue to be restricted to ITI-Alcatel's further augmenting the facilities
and enhancing product portfolio.
Spice (part of the MCorpGlobal) that provides cellular services in Punjab and
Karnataka, and currently sells Spice branded phones assembled in Taiwan (from
Wistron Neweb Corp and Inventec), has announced its plan to set up a
manufacturing facility in Baddi, Himachal Pradesh. Overall, the situation looks
heavily loaded in favor of Chennai, thanks to close coordination between the
Ministry of Communications and the state government of Tamil Nadu.
Sudesh Prasad
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