More and more global mobile handset manufacturers, including Motorola, Haier and Sony Ericsson are planning to set up manufacturing units in India to "be where the business is".
With the arrival of third generation mobile telephony, the country's telecom scene is all set for another revolution and the firms say it is more viable to stay near the market.
Motorola, the world's second largest mobile phone firm, is setting up its first manufacturing unit in India during the first quarter of 2007.
"The number of mobile users in India is going to double from what it is today in the next five to six years. Looking at that potential, it is obviously viable for us to set up a manufacturing facility here in India," said Motorola India's director (marketing) Lloyd Mathias on the sidelines of a three-day Mobile Asia 2006 exhibition in New Delhi, one of the largest in this region.
"We are opening up a plant in Sriperambudur, (near) Chennai, with an investment of over $100 million," he added.
The company is also ready with its own range of 3G handsets. However, according to Mathias, Wi-Max (worldwide interoperability for microwave access) technology is also going to enter the Indian market in a big way.
The penetration level in India is currently 13 per cent and only 42 per cent of the country is networked.
"In India the current penetration is about 12-13 per cent so there are definitely massive prospects for companies like us to grow. There is a huge untapped market waiting to be connected," said Haier Telecom India's vice-president Piyush Mathur.
Refusing to divulge any financial details, Mathur added, "We will be definitely setting up our own handset manufacturing company within the next couple of years. By then we hope to achieve more than seven per cent of the market share."
Haier Telecom has units in 21 countries, of which the biggest unit for manufacturing mobile handsets is in Xindao, China.
The company, within a year's presence in the mobile industry, has already sold over 2.5 million handsets.
Sony Ericsson, which started operations in 2002, has no immediate plans to open a facility in New Delhi but is on an expansion spree.
"As of now we have no plans to set up a unit here; however, it all depends on our growth potential. We may in future set up a manufacturing facility," averred Sudhin Mathur, the general manager of Sony Ericsson Mobile Communication India.
"We have tied up with some big retail outlets like Subhiksha and Pantaloons. Our handsets will also be made available through Reliance and Essar, which are going to start their operations by this year-end or early next year."
Sony Ericsson has also opened its exclusive Sony India-promoted retail outlets and plans to ramp up the stores to 50 by this financial year-end.
Newer players like China's ZTE Corporation and Yulong Ltd have also set up their offices in India and are extensively exploring investment opportunities.