Kyocera seeks FIPB nod to set up subsidiary

The US-based Kyocera Wireless Corporation (KWC) is planning to set up a wholly owned subsidiary with a proposed investment up to $2 million buoyed by the increase in the number of Indian mobile subscribers, which are expected to cross 100 million by 2006.

The company has applied for a Foreign Investment Promotion Board (FIPB) nod for setting up the arm which will import, market and sell high-end code division multiple access (CDMA) mobile sets in India, and also provide warehousing/distribution of spares in India. The company already has a presence through Kyocera Wireless (India) Pvt Ltd since August 2003 in Bangalore.

KWC is held by Kyocera Corporation of Japan, which is listed on the Tokyo and Osaka Stock Exchanges and is also traded on the New York Stock Exchange.

Several mobile makers have been eyeing India, one of the fastest mobile growing markets in the world, to set up manufacturing facilities.

The Finland-based Nokia and LG have announced setting up of manufacturing facilities in the country, Motorola too has initiated discussions internally to set up a production base in India.

With two CDMA-based service operators expanding their operations across the country, Kyocera has already sold more than 500,000 handsets in the country through third parties and expects this to grow significantly in the next few years. It expects to sell around one-two million handsets every year.

In a note to FIPB, dated November 16, 2004, KWC has stated, "The Indian entity will enable customers to have a single point contact for sales, maintenance and service of KWC products. This would effectively be achieved through trained Indian employees of the wholly-owned subsidiary and would ensure trouble-shooting with minimum turnaround time."

Besides Kyocera Wireless (India) Ltd, KWC also has an arrangement with the Hyderabad-based XL Telecom Ltd for assembling handsets for sales in India through operators.

KWC has made a total investment of Rs 1.3 crore till date in Kyocera Wireless (India) and intends to make an additional investment of Rs 2.5 crore for the software development services over three years.