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Thomas K. Thomas

Mr Serge Tchuruk, Chairman and CEO of Alcatel SA.

Mankapur (UP) , July 7

FRENCH telecom major Alcatel will invest 400-500 million euros over the next few years on setting up mobile equipment manufacturing facilities and a research and development centre in the country.

The company today announced a tie-up with the state-owned Indian Telephone Industries (ITI) to manufacture broadband (digital subscriber link-DSL) equipment at the latter's Rae Bareilly plant, starting next month.

"India is a strategic market for Alcatel and we want to emerge as a major player. We will be investing our knowledge, manpower in the country. Next month we will transfer the technology for manufacturing DSL equipment to ITI," said Mr Serge Tchuruk, Chairman and CEO, Alcatel, after inaugurating its joint venture with ITI for the manufacture of mobile base station (BTS) at the Mankapur plant.

Alcatel is also looking at setting up a factory for manufacturing mobile switches. That apart, the company is also setting up a 500-seat global research and development centre in association with another public sector company C-DoT for Wi-Fi technology. "India can now become an export centre for cellular equipment. From being a consumer of goods, there will be a change in the role for India," said Mr Tchuruk.

The Alcatel-ITI plant for manufacturing mobile base station, inaugurated today by Ms Sonia Gandhi at Mankapur, is set to be one of the biggest in the world.

The plant has an initial capacity for 2,000 base stations, which will be doubled in the next few months. The joint venture has a mandate for manufacturing 4 million lines for the state-owned Bharat Sanchar Nigam Ltd. A part of the manufacturing will be done at ITI's Rae Bareilly plant.

The Minister for Communication and IT, Mr Dayanidhi Maran, who negotiated the deal between ITI and Alcatel said, "It was sad to see that the fastest growing cellular market was importing most of its equipment.

The partnership with Alcatel is the beginning of an adventure, which will also resurrect public sector companies such as C-DOT and ITI as was envisaged when the UPA Government took over."

ITI until now was manufacturing fixed line telephony equipment and was on the verge of closing down due to declining demand. It is now foraying into manufacturing equipment for Code Division Multiple Access-based mobile network in collaboration with ZTE of China. ITI recently finalised an agreement with the US-based Tekelec for the manufacture of IP-based soft switches. Mr Maran said that more manufacturing units were being planned in ITI's units in Palakkad, Bangalore and Nainital.

With the Communications Ministry putting special emphasis on the manufacturing sector, companies such as Nokia, LG and Ericsson have announced plans to set up facilites.

The Government is expecting investments worth $900 million this year for telecom manufacturing.

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