News: Indian telecom body sees bright future for handset makers

(TT 08/06/2006) Calcutta - India is poised to become an export hub for mobile phones and has the potential to manufacture around 100 to 110 million handsets or 10 per cent of the world’s requirements by 2010. This will entail an investment of more than $1 billion.

According to the Indian Cellular Association (ICA), 30 million handsets will be produced annually by 2009 valued between $2.5 and $3 billion. It also sees a growth in the component industry.

“This year the country should be producing around 15 to 20 million handsets, some of which are being exported. It had manufactured about a million handsets last year. We expect the number to go up to 30 million in 2007. The Manufacturing Advisory Committee has set a target of cornering a 3 per cent share of the world output by 2009 and is working towards increasing this share to 10 per cent,” said Pankaj Mohindroo, president of ICA and chairman of the advisory committee.

Nokia, Samsung and LG are already operating in the country and more handset biggies are expected to flock here in the coming years.

However, the government needs to improve customs clearances to attract investors. The government also needs to promote venture funds for manufacturing, value-added services and after-sales services.

Mohindroo said the domestic mobile market has witnessed an unprecedented growth after the grey market was curbed by lowering import duties from more than 40 per cent (centre and state combined) to the existing 8 per cent.

With less than 0.5 million handsets sold in 2001, the current year is expected to generate sales of 55 to 60 million handsets, of which 10 to 15 per cent would be through the grey market.