ITI taps China firm to make mobile phones

In a bid to capitalise on the booming mobile phone market, Indian Telephone Industries (ITI) has entered into an agreement with Chinese technology provider ZTE to manufacture CDMA handsets in the country.

It is also scouting for partners for manufacturing GSM handsets. If the two proposals come through, ITI would become the first company to manufacture mobile handsets locally on a large scale.

The two proposals are under the scrutiny of the Department of Telecommunications (DoT).

Once the required approvals are in place, ITI would be able to roll out its CDMA handsets within 22 weeks, while it would take 32 weeks to complete the GSM project. According to a note circulated within DoT, the ITI-ZTE proposal is likely to be cleared within 15 days.

The project would also involve transfer of technological knowhow to ITI by the foreign collaborator. Companies including French major Alcatel are understood to have pitched in for partnering ITI in the GSM handset project.

Currently, more than 2 million new mobile subscribers are being added every month. With cellular tariffs falling and a number of operators competing for a larger share of the market, analysts have predicted the net additions to go beyond 3 to 4 million a month, offering a lucrative market for mobile handset manufacturers.

Most of the other handset providers, including Nokia and Motorola, are also evaluating the need for local manufacturing.

The move is part of ITI's strategy to diversify its product portfolio in the face of increasing losses. Against a turnover of Rs 516 crore, ITI has recorded a net loss of Rs 269 crore as on September 2003.

At present ITI manufactures a wide range of equipment including electronic switching, transmission equipment, access products, V-sat equipment and telephone instruments.