by CIO Staff

India Gets Its 1st CDMA Phone Manufacturer

Sep 25, 20062 mins
MobileSmall and Medium Business

India will soon have its first home-grown CDMA handset maker following a licensing deal announced Monday with Qualcomm.

Himachal Futuristic Communications (HFCL) plans to start manufacturing CDMA phones and other mobile devices in April next year, said S.K. Garg, HFCL’s senior vice president for business development.

The Delhi-based company plans to make 4 million units in the first year, of which about 3 million will be mobile phones and the rest fixed wireless phones and CDMA modules, such as PC cards for computers.

The products will be aimed initially at the domestic market, but down the line HFCL is looking at exports as well, Garg said on Monday.

CDMA technology vendor Qualcomm, of San Diego, California, announced Monday that it has signed a licensing deal with HFCL for use of its CDMA2000 technology, including a patent license to develop, manufacture and sell CDMA2000 products.

The deal is the first with an Indian company and provides a shot in the arm for Qualcomm, which was recently criticized by Indian operators for charging too much for its royalty rates and pushing up mobile phone prices in India, a cost sensitive market.

HFCL will pay Qualcomm license fees at standard worldwide rates, the companies said. “We don’t expect the royalty to add significantly to the cost of the handsets,” Garg said.

HFCL aims to enter the market with mobile phones priced well below US$40.

It would be in the interests of Qualcomm and other chip suppliers to lower their prices, so that HFCL can achieve its target of offering low-cost phones in large volumes in India, Garg added.

Several mobile phone makers, including Motorola and Nokia, have set up manufacturing facilities in India to tap the country’s booming phone market. Making the handsets locally will help HFCL to bag business from Bharat Sanchar Nigam (BSNL), a large government-owned mobile services provider. BSNL has already indicated that it would give preference to locally manufactured phones. HFCL already assembles imported mobile phone kits for Reliance Communications, one of the country’s large CDMA service providers.

-John Ribeiro, IDG News Service (Bangalore Bureau)

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