The favorable environment for growth in India’s telecom equipment sector has encouraged leading global players like Nokia to make major investments and set up manufacturing facilities in this country

The news published on Telegeography revealed the findings of a recent survey by Voice and Data magazine. According to the survey results, Indian telecom equipment market witnessed a 43.5% growth to reach USD 18.8 billion in the year ending March 31, 2007. Expansion in mobile and fixed line handsets business was 45%.

Among the telecom equipment companies, Nokia held on to its leadership in 2006-07 with Ericsson leapfrogging to second from fifth position in 2005-06. Another outcome of the survey was the revenue from the handsets segment, which grew to Rs. 23,452 crore in 2006-07, a greater part of which was from the mobile handsets

Growth in the telecom equipment market accelerated as a result of expansion in all kinds of networks in the country, increasing popularity of high-speed Internet access networks and the introduction and development of 3G wireless networks. Year 2006 was remained quite significant for the Indian telecom industry with a surge in services’ subscriber numbers as well as leading global equipment vendors and EMS companies pledging to begin operations and making investments in India.

With the overwhelming demand in the country, the focus is now more on the low cost products like handsets and equipment, which is responsible for the substantial investment being made in manufacturing in India. Nokia is in the process of setting up a manufacturing facility in Chennai, having announced its plans for India-made Nokia handsets. Motorola has followed suit with manufacturing plans in India for assembly of its most sought-after low cost C115 mobile handset (under US$ 45) manufactured in India using a third party equipment vendor.

A research analyst at RNCOS concluded, “The telecom industry is primed for making an investment to the tune of $6 billion in infrastructure for 3G mobile services expected to be operational by 2007. Domestic manufacturing centers are likely to produce bulk of 3G-network equipment. With the telecom equipment-manufacturing sector entitled to 100 percent FDI, India is likely to attract more investment. Bharti Teletech and Tech Mahindra among the leading domestic players are highly optimistic about the industry’s growth prospects.”  

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