Motorola sets sights on No.2 India slot

Yukari Iwatani Kane and Shailendra Bhatnagar

HONG KONG: Motorola Inc., the world's second-largest mobile phone maker, is close to taking the No. 2 spot in India as it ramps up its marketing and manufacturing facilities, a company executive said on Tuesday.

"We came from a very small market share. We have stepped up our efforts... we have made it the headquarters of our high growth markets," said Simon Leung, senior vice president of Asia, at the Reuters Global Technology, Media and Telecoms Summit in Hong Kong. "We should be number two in no time."

Industry sources said Motorola was currently the number three, trailing leader Finland's Nokia and Samsung Electronics.

Leung also said the company could also build a plant to make mobile phones in the world's fastest growing mobile market, which has surpassed China in terms of net monthly customer additions.

India, which has a mobile penetration rate of just 8 percent, added a record 4.7 million subscribers in January, taking its total mobile user base to more than 81 million. This exceeds the combined population of France and the Netherlands.

"We're now looking at the possibility of creating a handset manufacturing facility in India," he said, adding that the company already had a tie-up to make network equipment, which is a requirement to bid for contracts from state-run Bharat Sanchar Nigam Ltd.

Leung said Motorola would be bidding for BSNL's mega tender of 60 million GSM lines, which has a provision to buy 1.5 times as many.

"If you look at their history, they have bought the maximum," he said, speaking of the deal's potential.

Outside of India, Leung named China as its target region, although he didn't expect third-generation (3G) equipment contracts to be as big as expected since operators already have nationwide networks based on second-generation technology and only need to begin rolling out 3G networks selectively.

He said he expected the long-anticipated 3G licences to be awarded by the end of the year or the beginning of 2007 after trials are completed for TDS-CDMA networks. TDS-CDMA is a home-grown next-generation technology in China.

Motorola currently has about 20 percent market share worldwide behind Nokia, which is also the leader in India with more than two-thirds of the market.

Nokia is in the process of setting up a handset unit in India, while South Korea's Samsung and LG Electronics Inc. have plants that are already producing phones for the local market.

Analysts say more than 50 million handsets are expected to be sold in 2006 in India, up from about 34 million in 2005.