Motorola announced Wednesday an initial investment of $30 million in a new manufacturing facility at Sriperumbadur near Chennai in south India. The company plans a total investment of $100 million in phases.
The facility, which will be operational next year, will make mobile handsets and network base stations.
In December Motorola launched a low-end mobile handset in India. A local contract manufacturer made the C115 for Motorola, of Schaumburg, Illinois. India’s mobile market is booming, with mobile subscribers outstripping fixed line telephone subscribers. The country added 3.88 million mobile subscribers in April to take the total number of mobile subscribers to 97 million, according to the Telecom Regulatory Authority of India.
Motorola’s facility is coming up in the 300-acre Sriperumbadur Hi-tech Special Economic Zone being developed jointly by Motorola and the local state government of Tamil Nadu.
Chennai, which is the hometown of the country’s IT and communications minister, Dayanidhi Maran, has emerged as a popular location for communications and network company facilities. Motorola competitor Nokia set up a manufacturing facility in the city as well as a network operation center for global customers.
Manufacturing locally helps multinational companies such as Motorola and Nokia bid for contracts from India’s large state-owned service provider, Bharat Sanchar Nigam Ltd. (BSNL). BSNL mandates that its suppliers to do some manufacturing in India.
BSNL’s move is part of a government strategy to boost manufacturing in the country. Telecom and IT equipment manufacturing is crucial for job creation, Maran said last month in Delhi. The government expects about an $11 billion investment in manufacturing in the next two to three years.
Motorola already has six Indian research and development centers, which employ about 3,000 engineers. The Indian centers are involved in mobile phone design.
