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Thomas K. Thomas

Hopes to ride on increasing subscriber base

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New Delhi Jan. 29 Russia's largest private sector consumer services company AFK Sistema is looking to set up base for manufacturing telecom equipment in India.

The company's top executives were part of the business delegation accompanying the Russian President, Mr Vladimir Putin, and have expressed their interest in the growing telecom market. Sistema had earlier tried to enter the Indian cellular services market through an acquisition.

While the Group has business ventures across various sectors including insurance, media, banking and real estate, in the telecom space it offers services across the Commonwealth of Independent States, Europe, North America, West Asia and South East Asia. The manufacturing business is managed through Sitronics where Sistema holds nearly 77 per cent stake.

Attracting Investments

Sitronics designs and installs a wide variety of telecommunications equipment and software, including fixed network and mobile network equipment, billing and operational support systems, new generation network applications and systems integration.

At present, the company has production facilities in Moscow, Zelenograd, Kiev, Prague, Voronezh and several other East European cities. Details of Sistema's India plans are not immediately known.

Indian telecom hardware sector has been attracting investments from global majors including Nokia, Cisco, Motorola, Ericsson, ZTE and a number of other gear manufacturers who are firming up their plans.

With traditional big markets like Europe and US getting saturated in terms of subscriber growth, the Indian telecom market is on top of most equipment vendor's list. The Government is expecting investments worth $1 billion in equipment manufacturing facilities riding on a huge growth in telecom subscriber base.

Buying Equipment

With more than five million subscribers being added each month, Indian operators are buying large quantities of equipment to support their rollout plans. Bharti, for instance, will invest $2.5 billion in 2006-07 in expanding its network. State-owned BSNL is in the process of finalising an equipment contract for its cellular network worth $5 billion.

Other operators including Reliance Communications, Hutch, Idea Cellular and Aircel are planning to expand offering opportunity for equipment manufacturers.

More Stories on : Telecommunications | Outlook | Foreign Direct Investment

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