The Hindu Business Line : Nokia to invest $150 m to set up handset facility

FINNISH telecom major Nokia has announced an investment of up to $150 million over the next four years to set up a mobile handset manufacturing facility in India. The unit is expected to give employment to about 2,000 people.

Announcing the initiative here on Wednesday, Mr Pekka Ala Pietila, President, Nokia, said: "India's position at the heart of a rapidly growing mobile communication region makes it an attractive option for establishing our new manufacturing facility here. The factory would be an integral part of our global manufacturing network and help fulfil the growing demand as mobile communications become increasingly affordable and available to more people in this diverse region."

The company is likely to finalise the site for the manufacturing plant and other pre-requisites like logistics by the first quarter of 2005 and hopes to roll out the first handset from the Indian facility by the end of 2005 or early 2006.

The Nokia President said India would be among the top five markets in terms of sale of handsets and among top three in terms of subscribers.

At present, India has more than 42 million mobile users and this is expected to touch a 100 million by 2005, according to industry estimates.

"Volumes have changed in India and this is the key reason behind setting up a manufacturing facility here. This will be Nokia's 10th facility all over the world," Mr Pietila said.

Other handset manufacturers such as Motorola, LG, Hyundai and Sony Ericsson are also evaluating a mobile manufacturing unit in the country.

Nokia is negotiating with its key component suppliers across the world, which are already working with them at other manufacturing facilities, to set up the facility. The company plans to make handsets for both GSM and CDMA users and at various price points.

Mr Sanjeev Sharma, chief of Nokia India, said, "We are in negotiations with all the key operators for marketing and distribution of handsets. It is extremely important to have a close co-operation with them for our products."

In India, Nokia is the market leader when it comes to mobile phones. The company also has set up software development facility in the country.

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