Another significant investment in EMS space relates to Flextronics. The company has ten design, manufacturing, logistics, and global shared services facilities in India including its Flextronics Sriperumbudur Industrial Park, which was inaugurated in November 2006. The Flextronics Industrial Park in Sriperumbudur is modeled after the industrial parks the company has elsewhere in the world. Says A Gururaj, GM and director, Flextronics, "We have fully-integrated, high-volume industrial parks in Brazil, China, Hungary, Malaysia, Mexico, and Poland. These industrial parks provide total supply chain management by co-locating our manufacturing and logistics operations with our suppliers at a single low-cost location."

Sources at Flextronics say that this strategy increases flexibility and reduces distribution barriers, turnaround times, and overall transportation and production costs. The company is replicating a similar ecosystem at the Sriperumbudur industrial park. Flextronics India manufacturing facilities cater to industries like cellular phones, base station modules, DSL modems and WLL wall-sets, outdoor and indoor cabinets/enclosures, and consumer set top boxes. It will also cater to PoS and video-on-demand systems.

Nokia needs to be credited for firmly establishing the EMS capabilities of India. Says Sachin Saxena, director, Operations, Nokia India: "We have always believed in the potential of India emerging as a telecom manufacturing hub and we were the first to invest in this opportunity. Over the last decade, India has successfully established its credentials as a trusted IT services destination, and we believe it is time the 'Made in India' tag was made acceptable even in telecom manufacturing."

In January 2006, Nokia announced its plans to set up a manufacturing base in India, with a commitment to invest $150 mn over a four-year period. This was Nokia's 15th manufacturing facility and one that would manufacture both handsets and network equipment. Over the last one year, the Indian manufacturing facility has grown in leaps and bounds, producing in excess 60 mn handsets as of July 2007. In addition, the factory supports the manufacturing of handsets with thirteen language interfaces, ten of which are Indian. To cater to the burgeoning needs of the Indian market, Nokia has recently expanded the floor space of the factory from 30,000 sq mt to 53,000 sq mt.

Currently, the Nokia factory exports to over fifty-eight countries in South East Asia, Middle East, Africa, Australia, and New Zealand. The factory currently employs 4,700 people, of which 70% are women. The Nokia Telecom Park has also received an investment of $500 mn, with seven global component manufacturers likely to generate in excess of 30,000 jobs by 2008, when fully functional. These global component manufacturers are at present in different stages of setting up their units.

The Nokia Telecom Park also has made significant progress with seven suppliers already signed up. These include Salcomp, Aspocomp, Foxconn, Perlos, Jabil, Laird, and Wintek. Of these, two suppliers-Salcomp and Perlos-have already started shipping to Nokia. The Nokia Park is a clear proof point that a hub and spoke model best works in telecom equipment manufacturing.

Take the case of handset mechanics supplier Perlos which inaugurated its manufacturing facility inside the Nokia Telecom Park in Sriperumbudur recently. The company has pumped in investments to the tune of $30 mn. The Perlos plant construction began in November 2006, and the first shipment was made during mid-August 2007. The built-up area of the plant is about 20,000 sq mt and Perlos employs around 770 employees. The company will initially address the needs of Nokia India, and will cater to non-Nokia customers in India as well as globally.

Says Jarmo Kolehmainen, MD, Perlos India: "Our manufacturing facility in Chennai will enable us to increase our production pace to meet the global demand. The Perlos Chennai facility offers services like whole product design to manufacturing, logistics, and new product versions."

Close on the heels of Perlos, another company that is part of the Nokia-driven ecosystem is Salcomp, which makes chargers. Arto Makela, director, India Operations, Salcomp, says: "Our plant in India is operating at a good speed in less than one year. We are going to ramp-up the annual production capacity to 50 mn chargers during this year. Expansion investment for 2008 is already approved by the parent company."

At Sriperumbudur, leading telecom players meticulously assemble the EMS jigsaw, and what makes it really significant is the kind of investments these players are putting in and the long-term implications. Take the case of Motorola, which has set up a state-of-the-art manufacturing facility in Sriperumbudur. This facility manufactures a wide range of mobile handsets targeted at all segments of the market-be it low, mid or high tier, including the latest Razr2 V8 phones. According to Henry Mohan, director, Manufacturing Operations, Motorola Chennai, "We are currently manufacturing mobile phones varying from the low to mid and top tier. Depending on our business requirements, we will explore options to support our growth plans out of our India manufacturing operations."

Leading Players
Ericsson has the distinction of being the first multinational company in India to start manufacturing radio base stations and controllers, and mobile switching centers. Through these offerings, the company offers a complete range of products and solutions for the new generation of mobile communications. Ericsson also offers high-speed broadband products and solutions to its customers. The company is shipping over 3,000 BTS per month. It has also enhanced the capacity to be better prepared for future needs of its customers.

P Balaji, vice president, Marketing and Strategy, Ericsson India, says: "Ericsson established a manufacturing unit in India in 1994 at Kukas, near Jaipur. The unit covers a total land area of 81,000 sq mt, with a built-up area of 5,610 sq mt. We see benefits to better support our customers with our factory operations in India. It gives us the ability to be faster and more responsive to the massive rollout plans of the operators. We have also systematically worked with localization of the equipment to create a system of suppliers to better address the needs of the Indian market."

Why India?
In a way, the EMS boom is currently giving a fresh lease of life to hardware engineers in the country. With thousands of engineers graduating every year, sourcing available talent is easy in India. In addition to the relatively low labor cost, putting in place a manufacturing base makes it easier to address country-specific demands. EMS players in the fray feel that setting up base in a booming market anywhere in the world gives access to a consumer base that run in thousands. Even acquiring a small base translates into huge revenues.

Says Mats Granryd, MD, Ericsson India: "Ericsson as the leader in Indian telecom is strongly committed to making investments in manufacturing here. We believe that there is tremendous growth in the next four to five years in India, which is witnessing an addition of over eight million subscribers every month. This makes for a good platform for companies to set up a large capacity. Over a period of time, the entire ecosystem of chip and component makers, equipment manufacturers, and handset makers will come up. We are happy that the government has announced a special forum to push exports as well. We are sure that over a period of time, it will help develop India as a manufacturing hub."

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