Others: Manufacturing: Ramping Up

Other players like LG are also equally bullish about their manufacturing operations in India. Says HS Bhatia, business group head, LG GSM Division, LG India: "For handset manufacturers, the market has never been more demanding. In a short span of two-and-a-half-years, LG has started exporting its GSM handsets to Sri Lanka, Bangladesh and Nepal, and would soon start exporting to the Middle East and African countries as well. Currently, LG manufactures one million handsets in the Ranjangaon plant, and this figure is expected to grow exponentially in the coming years."

Some Leading Manufacturing Initiatives
Company	Location	Description	Estimated Investment
Aspocomp	Chennai	PCB Manufacuring	$200 mn
BPL	Bangalore	Handset manufaturing	$2.2 mn
Elcoteq	Bangalore	Telecom manufacturing	$100 mn, with significant sum invested during 2006
Ericsson	Chennai	R&D faclity and global service delivery center	$ 50 mn already invested, additional $50 mn earmarked
Flextronics	Chennai	Telecom hardware manufacturing	$100 mn
Hon Hai (Foxconn)	Chennai	Mobile handset and components and electronic hardware and related services	$110 mn
ITI	Mankapur	Base stations and plant in Rae Bareli factory	$7.5 mn
Laird Technologies	Chennai	Mobile phone accessories	$25 mn
LG	Pune	Handset manufacturing. In a short span of two-and-a-half-years LG has started exporting its GSM handsets	$60 mn by 2010
Motorola	Chennai	Handset manufacturing	$100 mn
Nokia	Chennai	Mobile handset manufacturing	$200 mn
Perlos	Chennai	Mobile handset mechanics	$12 mn
Salcomp	Chennai	Mobile phone chargers	$8 mn
Samsung	Manesar	Mobile handset manufacturing	$15 mn, additional expansion plans at an estimated $200 mn in the pipeline
Sem India	Hyderabad/Chennai/Kolkata	A fab facility with strategic investing from AMD, Flextronics, Govt of AP and others	$3.2 mn by 2009
Siemens	Hyderabad/Chennai/Kolkata	Telecom equipment	$100 mn
Spice	Baddi, HP	Low cost handsets	$23 mn
TAPP Semiconductor	Chennai	Production and packaging of chips	$200 mn
Telcordia Technologies	Chennai	Software and services for IP wireline and cable	$30 mn
XL Telecom	Hyderabad/Chennai/Kolkata	Capacity to make 10,000 CDMA handsets in SKD facility	$50 mn in phased manner
ZTE	Manesar	CDMA equipment supplier	NA

KEY CHALLENGES
One of the biggest areas that most industry leaders point out is that India should emulate China when it comes to improving its infrastructure. Power tops the industry's concern list. Uninterrupted clean power is a primary requisite for 24/7 manufacturing operations, and this is where India needs to ramp up it capacities. Apart from that, roads and availability of water are also cited as top priorities the government must look into on a war footing.

The industry, meanwhile, is also taking up the physical infrastructure issues with the government. Nokia, for instance, is already in talks with the government to spearhead some of these initiatives in and around Sriperumbudur. These include better transportation links-roads, railways, local airport infrastructure, availability of power and stabilization of the SEZ policy.

Experts also point out that another challenge in India is the availability of skilled manpower.

OUTLOOK
The rush by global majors to manufacture handsets and components is expected to change the face of the Indian telecom industry. Once all the plants by global manufacturers are up and running, the handset manufacturing industry alone is expected to cross $7 bn in turnover by 2010. Over the next couple of years, it is expected to pull in a total investment of over $400 mn. Hence, the telecom manufacturing space in India has all the signs of emerging as a key growth driver. Optimism apart, industry experts also caution that the government needs to retain the current momentum and must continue to liberalize its manufacturing policies, leading to India becoming a manufacturing hub in the real sense.

Shrikanth G
shrikanthg@cybermedia.co.in