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ITI to invest Rs 7 crore on GSM lines

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CIOL Bureau
New Update

Shailendra Bhatnagar

NEW DELHI: State-run Indian Telephone Industries Ltd. will spend Rs 7 crore($1.6 million) by September to boost its GSM phone line capacity in the world's fastest growing major wireless market, the government said on Wednesday.



ITI surged as much as 11.75 percent on the news to a new three-year high of 42.80 rupees on the Bombay Stock Exchange. The stock was ranked fifth on the exchange's top trading list in terms of volume.

Loss-making ITI, which has an existing manufacturing capacity of 1 million GSM lines, will spend the money on its manufacturing site in Uttar Pradesh which was set up in collaboration with Alcatel.



The capacity will be increased by 3 million GSM lines by September. ITI, which has a technical collaboration with Alcatel, has already spent Rs 38 crore to expand the unit.



The expenditure is a part of a Rs 1000 crore government plan to revive the loss-making unit. ITI's four other factories will also make a range of telecoms equipment as part of the package.

There is huge demand for mobile equipment in India's galloping wireless market that is adding an average of 1.7 million new users each month.



More than three-fourths of the users in the 56-million strong sector use GSM technology.



The sector, which charges the lowest local call rates in the world, offers a huge potential for growth as less than six in 100 Indians use mobile facilities compared with more than 25 in China, the world's largest wireless services market.



The statement said officials from state-run telecoms companies Bharat Sanchar Nigam Ltd., India's top telecoms firm by sales, and Mahanagar Telephone Nigam Ltd. will pick up the first consignment of GSM lines from ITI on Thursday.



Apart from BSNL and MTNL, firms such as Bharti Tele-Ventures Ltd., Reliance Infocomm Ltd. and Hutchison Essar Telecom Ltd. offer mobile services in the billion-plus country.

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