The mobile phone sector is growing rapidly in India. Since the mid 1990s, its average per annum growth rate-hovering at 85%-has been phenomenal. From 1.14 mn subscribers in 1999, the cellular industry now has almost 200 mn mobile users in India. Reflecting on this, Anil Arora, business group head, GSM and Kitchen Appliances, LG Electronics India, says, "Despite the boom, experts believe that there are new markets to be tapped. At LG, we understood the huge potential of the telecom industry in India and entered the GSM segment, armed with our well-known brand name and international experience in the segment. We are one of the pioneers in the GSM handset manufacturing."

In October 2005, LG announced the setting up of a greenfield GSM handset manufacturing plant in Ranjangaon, near Pune, with an investment of Rs 500 crore over five years. The plant covers over fifty acres of land, and the company plans to expand its installed capacity to 20 mn handsets by 2010.

One of the key advantages of companies having a manufacturing hub in India is that they can address the needs of the regions in the vicinity. For instance, LG is currently exporting GSM phones to countries like Nepal, Bangladesh, Sri Lanka, South Africa, and the UAE. In the next couple of years, it will witness a significant increase in exports to various countries in the Middle East, Asia, and Africa. The booming market also keeps inventories in the pink of health. This ensures that manufacturing does not completely move away from production.

Rakesh Bharti Mittal, vice chairman and managing director, Bharti Teletech, says, "We have increased our production and the revenue is more on distributed products because those are high-value products. But, if we see, last year we did 5 mn units. Two units are capable of manufacturing 5 mn units, and as and when it requires, we can increase the production."

The game here is in creating a manufacturing process where supply chain makes for overall success. And, all the leading manufacturers in the fray have very well laid out supply chain.

Says Alok Garg, managing director, INDIC Electronics, "India has tremendous opportunities because of a simple reason: our huge population is our opportunity, if this human resource is developed and used effectively. If we can win the confidence and prove our ability to deliver quality products in the international market, then we will see a major growth in the manufacturing sector."

INDIC is the result of two entrepreneurs, Anil Gupta and Alok Garg, who have created the company through a JV between $120 mn Electronica ITEL and DigiProces, both companies based out of Spain for EMS unit in Bangalore.

S Narayanan, CMD of MRO-Tek, says: "Global majors in the electronics industry and their products coming out of the plants will not only serve the market here, but will also cater to other global markets. These companies make the most of the cost advantage through labor arbitrage and the quality of work done by our skilled work force at these manufacturing plants."

In the last three years, MRO-TEK has invested Rs 12 crore in R&D. Company sources say the investment has started yielding returns. The company has developed new products, addressing the perennial issue of last mile broadband connectivity.

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