Nokia Oyj, the world's biggest maker of cellphones, opened its first factory in India to tap demand in the world's fastest-growing wireless market.
The factory, built at a cost of US$150 million, will make handsets and network equipment. Nokia expects to employ 10,000 employees in the next few years, according to a statement issued by Nokia yesterday in the southern Indian city of Chennai.
"India will be the second-largest mobile handset market globally by 2010 after China," Nokia chief executive Jorma Ollila said.
"Nokia is working closely with telecommunication service providers to reduce the cost of ownership and make more affordable and attractive handsets," Ollila said.
Nokia, an Espoo, Finland-based company, and rivals such as Ericsson AB that make telecom gear are setting up factories in India, where the number of mobile-phone users is projected to double to 200 million by the end of next year. Local phone companies are expected to spend as much US$36.7 billion expanding networks in the next three years, the government estimates.
The factory in India will be Nokia's 10th worldwide for making handsets, the company said.
Aspocomp Group Oyj, a Finnish maker of printed circuit boards and a Nokia supplier, will expand its business operations by building a printed circuit board plant in the Nokia Telecom Industry Park, near Chennai, Nokia said in the statement.
The plant will be India's first high-density interconnection printed circuit board facility and will be set up with an investment of US$70 million, according to the statement.
Perlos Oyj, the world's largest maker of plastic cellphone parts and also a supplier to Nokia, will build a manufacturing plant within the Nokia Telecom Industry Park at a cost of US$12 million.
Fewer than one in 10 of India's 1.1 billion people own mobile phones. The number of cellphone users at Indian companies including Bharti Tele-Ventures Ltd, the biggest by subscribers, rose 5.4 percent to 84.3 million last month. China, the world's biggest mobile-phone market by users, added 5.4 million users in January, a gain of 1.4 percent, for a total of 398.8 million.
"Our position in the fastest-growing market in the world continues to be strong," Ollila said on Jan. 26, referring to India's cellphone industry.
India's government has set a target to more than double the total number of mobile-phone users in the nation to 200 million by next year-end and is encouraging local manufacturing of equipment and cheaper handsets to meet its goal.
Nokia supplies network gear to India's top five operators, which use the global system for mobile communications, or GSM, standard. The company has factories in countries including Hungary, Finland and China.