Nortel may start manufacturing in India

By agencies   |   Wednesday, 18 May 2005, 19:30 IST
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NEW DELHI: Canadian Telecom gear company, Nortel Networks Corp may start manufacturing in India should it become a condition to win government projects. “Nortel would consider manufacturing to meet some of the criteria,'' Chief Executive William Owens said. It's not a natural thing for us. We would rather use local vendors.” Nortel, which won its first contract in India last August to supply wireless systems worth $500 million to state owned telecom operator Bharat Sanchar Nigam Ltd (BSNL) expects more government orders. BSNL, which plans to spend $18 billion in three years to expand its network, has said it prefers equipment vendors with a manufacturing base in India. Nortel had a loss of $164 million last year implementing the Bharat Sanchar contract, Owens said. It expects a $35 million deficit in the first half because of “pricing pressure as a result of the competitive nature of India's telecommunications market,'' he said. Nortel's move to consider manufacturing in India follows plans by Nokia, the world's biggest mobile-phone maker, and LG Electronics Inc. to make mobile phones in India. Sweden based Ericsson AB said it will spend $50 million in two years to upgrade its Indian manufacturing plant. Nortel plans to work with an Indian company or a government organization to develop technology that will help telephone companies to expand their networks in rural areas at cheaper costs. “We'll do more research in India in the areas of rural deployment of networks and development of low-cost equipment,” Owens said.

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