China Mobile mulls handset factory in India by 2012

Shenzhen-based China Wireless Technologies is planning to set up a mobile handset factory in India by 2012 through its Indian subsidiary, Coolpad Communications. The company will invest Rs 300 crore to Rs 400 crore in the plant and a research centre.

This comes at a time when the Indian government has virtually banned the sale of telecommunication equipment by Chinese companies like Huawei Technologies in the country due to security concerns. Huawei, as well as ZTE, has of late shown interest in setting up a manufacturing facility in India.

Coolpad will be the first Chinese company to manufacture mobile handsets in India. India is the fastest-growing market for mobile telephony in the world. All told, there are over 600 million users in the country. Over 100 million handsets were sold in the country in 2009, which was about the same as in 2008. Nokia is the biggest player in the market, followed by Samsung. A clutch of local brands like Karbonn, Lava and Micromax too have gained market share through aggressive pricing.

Both Nokia and Samsung have set up production facilities in the country. Coolpad could be the next. The company, which offers CDMA and dual mode handsets in India through Reliance Webstore, will also start its research & development centre by next year.

“We will open our R&D center in Delhi and Mumbai by next year. Currently, we use services from our center in China. Subsequently, we plan to set up a manufacturing facility in 2012. The total investment would be in the range of Rs 300-400 crore over a period of time,” Coolpad Communication Managing Director Sami Al-Lawati told Business Standard.

The company also plans to increase its current employee strength of about 200 to 300 by the end of this year and 1,000 by end of 2012, he said. The Chinese company has forayed into the Indian market through a tie-up with Reliance Webstore, the retail arm of Reliance Communications. India was the first overseas market for Coolpad. The company will now foray into USA and Brazil.

The company is currently rolling out India’s most affordable touchscreen CDMA mobile phone, the Coolpad S100, one of the bestsellers in China at a price below Rs 4,500. It plans to introduce 15 new models this year. The price tags are aggressive – about half of rivals. “Coolpad will follow a two-pronged strategy to drive its CDMA volumes. While the operator-bundled offerings will help gain volumes for its low-end phones, an independent drive for distribution-led sales will help increase smartphone volumes,” Al-Lawati said. Coolpad is targeting sales of one million handsets within a year of its operations.