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Spice handset plant to be up by Dec '06

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CIOL Bureau
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NEW DELHI: Spice Ltd. will set up a GSM handset facility to tap surging demand for mobile phones in India, the world's fastest growing wireless services market, said chief executive Kunal Ahuja.

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"We are looking at making at least a million handsets in the first full year of operations," he said. "The factory should be ready by the end of this year, and make at least 100,000 units a month."

India, Asia's third-largest economy, is experiencing a mobile revolution as the world's cheapest tariffs -- less than 2-3 U.S. cents for a minute-long local call -- attract users.

An intensely competitive handset market is dominated by Nokia, which has more than half of sales. The Finnish firm inaugurated a handset plant in India in March.

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Other players in the sector include Motorola Inc. and Sony Ericsson.

Ahuja said the factory would churn out five GSM models priced at up to Rs 5000 and trial runs were expected to start in September.

Spice currently imports 50,000 units a month and sells them primarily in northern and western parts of the country.

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Ahuja declined to give any investment details.

Based on the outskirts of Delhi, Spice is a part of the Modi group which also runs a GSM services business through Spice Communications Ltd.

Malaysia's dominant phone provider, Telekom Malaysia, bought a 49 percent stake in Spice Communications for $178.8 million in March.

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