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Mumbai: LG Electronics, the South Korean electronics giant, has planned a Rs 900 crore ($200
million) additional investment in India over the next four years to ramp up its GSM
handset manufacturing facility at its Pune plant.
The South Korean chaebol is also looking at starting production of
mobile handsets compatible with the next generation of telecom service standards, expected to be
launched in India sometime next year.
LG would also ramp up its research and development (R&D) facility in India, currently
located in Delhi, top company officials said.
³By 2010 we will spend $200 million in India which will take our GSM
handset manufacturing capacity to about 8-10 million handsets per year,¶¶ Steve Koh, GM,
Indian Operator Business Group, LG Electronics, told TOI.
For LG¶s handset business, India is one of the most important emerging markets where the
company is expecting an annual growth of about 25% in handset sales till 2010.
At present, LG¶s Pune plant, that started manufacturing GSM handsets over a year ago,
produces about 2 million handsets per year.
With regard to its global GSM handset business, the company is trying to focus more on India
than any other developing country. ³We are focussing more on the Indian market than any other
BRICs (Brazil, Russia, India, China) markets,¶¶ Koh said. A result of LG¶s heightened focus on
India is that Koh, currently located at LG¶s headquarters in Seoul, will shift his base to India
early 2007.As the Indian telecom service providers are planning to move to the third generation
(3G) system, LG too is planning its moves on the same lines.
The company, which currently manufactures only 2G GSM handsets at the Pune plant, will start
manufacturing 3G enabled handsets from mid-2007, Koh said.
Although the company is bullish on the growth of the GSM business in India, LG is still
undecided whether to start producing CDMA handsets at its Pune plant. At present the company
is closely watching Anil Ambani-controlled Reliance Communications¶ moves on the GSM
front. About four years ago when Reliance Comm had started its services in the country, it had
sourced all its handsets exclusively from LG. The Korean telecom giant still commands over
70% of the CDMA handset market in India. But any decision to start producing CDMA phones
here would depend upon the future of CDMA service in the country.
LG is also planning to increase its R&D staff strength to about 1,000 personnel by 2010 from
about 600 now.