Iti Shelves Cellphone Handset, Pager Unit Plan

In its board meeting last week, ITI has decided that given the proposals for reduction of import duty on such equipment, it would no longer be economical for the company to manufacture these equipment indigenously.

ITI had finalised an agreement with a UK firm for technology tie up in the proposed cellular handset project. For the manufacture of paging equipment, the company had even entered into an agreement with a Singapore-based firm for technical collaboration. The production of pagers was due to commence in the current fiscal.

However, the cut in import duty on pagers and cellphones has thwarted ITI's plans of moving into the higher end of the market for communication equipment.

 

ITI director (finance) K C Gupta said the company has abandoned its earlier proposal of manufacturing these equipment. In case the Union Budget proposals are revised and such a venture becomes viable, we will pursue our plans, he said.

Gupta said ITI, which incurred a loss of Rs 280 crore last year, is embarking on a major financial and organisational restructuring exercise to evolve a turnaround strategy.

An international consultant will be appointed to suggest methods to be undertaken for such an exercise, he added.

We hope to break even within the two years. For this we have chalked out a three pronged strategy. This would involve manufacturing more value-added products, diversifying our range of products and cutting down costs wherever possible, Gupta said.

This includes starting operations based on very small aperture terminals (VSATs), mobile radio truncking services, repair and maintenance of DoT exchanges as well as provide turnkey solutions to private operators in basic telecom services.