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Nokia to invest $100mn in India

Nokia to invest $100mn in India
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First Published: Thu, Aug 23 2007. 03 30 PM IST
Updated: Thu, Aug 23 2007. 03 30 PM IST
New Delhi: India has emerged as the second largest handsets and network equipment market after China for telecom giant Nokia, which has manufactured 60 million mobile phones at its Chennai facility in just 18 months.
India moved ahead of markets like the UK and the US in the first half of this fiscal based on sales of handsets and network business, but the company did not disclose the numbers.
“In 2004, Nokia had employed 450 people in India but today we have over 9,000 in India... total outlets in India currently stands at 95,000 out of which 50,000 are selling exclusive Nokia brand phones,” Nokia Worldwide CEO Olli-Pekka Kallasvuo, who is on a India visit, told reporters here.
On the network front, the company which recently merged with Siemens, is also ramping up its capacity in Chennai at an investment of over $100 million in the next three years.
Asked whether Nokia would set up another mobile manufacturing unit in the country, he declined to give details, but said: “We will continue to grow in India at a much faster pace.”
Initially, the manufacturing unit was catering to the domestic market, but currently about half of the production is exported to about 58 countries, he said.
On the controversial BSNL tender issue, where Nokia had emerged as the second lowest bidder quoting $167 per line compared to $107 by Ericsson, he said: “We have not received Advance Purchase Order from BSNL so we can not comment at this moment.”
The company has invested $50 million in its Telecom Park, which will also have seven global component manufacturers as part of the ecosystem. The Park is likely to generate over 30,000 jobs when fully operational, he added.
India currently has 185 million mobile subscribers, Kallasvuo said, adding that Nokia is expecting this figure to double over next three years.
Although, he did not announce any investment plans to expand the manufacturing capacity at its Chennai unit or opening up another facility in India, Kallasvuo did mention that “as and when required Nokia will ramp up the capacity.”
“Today, Nokia hosts a comprehensive Nokia R&D, manufacturing and design presence. Moreover, we are also the country’s leading provider of wireless infrastructure through Nokia-Siemens networks, the newly merged entity. This not only reiterates our commitment and belief in the market but also underscores India’s emergence as a strategic resource hub for Nokia globally,” he said.
‘Japanese vendor responsible for battery crisis’
Facing wrath from customers over faulty batteries, Nokia has held Japanese battery maker Matsushita responsible for supplying the component and said it will take action after investigating the issue.
“We are investigating into it. But of course they are responsible to us,” Nokia’s worldwide CEO Olli-Pekka Kallasvuo said when asked whether Nokia was planning to pass on the cost of replaced batteries, estimated at 46 million globally, to the Japanese company.
The world’s biggest mobile phone maker, which last week issued a product advisory for replacement of faulty batteries, has till date received about six million calls from Indian subscribers, of which about 4.6% (over 300,000) cases qualified for replacement.
Kallasvuo, however, commended the pro-active intervention of the company in taking action and said: “Nokia as a brand has emerged even stronger.”
The company did not divulge details about the financial cost for replacing batteries. It had issued a product advisory for the Nokia-branded BL-5C battery manufactured by Matsushita Battery Industrial Co between December 2005 and November 2006.
Asked whether Nokia would severe ties with Japanese firm, the Nokia chief refused to make any statement and said, “we are still investigating the matter.”
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First Published: Thu, Aug 23 2007. 03 30 PM IST