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Business Round-up 

Mobile major comes to India

WHATISINDIA
June 12, 2004

India is a hot spot for mobile handsets, and Elcoteq, the Finnish electronics manufacturing giant, has announced it will set up a production unit in Bangalore. Indian industry grew by a healthy 9.4 per cent in April this year, and Infosys remained a preferred training destination as it attracted thousands of intern applications. 

Elcoteq's unit will be operation within six to eight months, and its spokesman Henry Gilchrist said it had been planning for the last 18 months to come to India. The company chose Bangalore, he said, because the city was "tech-friendly". In two to three years, it will be manufacturing 4 to 6 million handsets a year, catering first to the domestic market and later to the foreign market. About 25 million handsets are sold in India each year, while the corresponding number in China is 75 to 85 million. 

Karnataka's budget looks all set to leave IT, keep BT, and encourage the farm sector. The governor's address to the legislature, which shows the drift of government policy, indicated that health and education could get more importance than IT, to which the previous government had given top priority.

India may be a cost-effective BPO destination, but the US is also looking at its own recession-hit towns for inexpensive solutions. Wages in small towns are much lower, and some Indian companies have not performed to expectations. Dell Inc of Round Rock opened a call centre in Twin Falls (USA) after closing a similar centre in India following customer complaints. That seems to be a warning bell for Indian BPOs. Delivering cost-effectively is not enough, they must be efficient too.

A study said shipment of personal computers to Asia-Pacific is expected to grow by 14 per cent in 2004. China Eastern Airline Company ordered 20 A330 widebody jets from Airbus. Infosys reeled under a deluge of intern applications, proclaiming once again that it was one of the world's most preferred training destinations.

Overall:

Elcoteq came to India: The Finnish mobile handset company will set up a production unit in Bangalore.

Karnataka shifted focus: It will less attention to IT, and more to education and health.

BPO industry heard an alarm bell: The US is looking at its own small towns to see if it outsourcing to India can be minimised.

Interns flooded Infosys with applications: The IT company ranks high as a training destination.