Ericsson plans to invest Rs 100 crore in Chakan plant
Chakan facility would serve as an export hub for the company's exports to South East Asia, West Asia and Sub Saharan African regions.
Pune: Swedish telecom technology giant Ericsson, which is setting up its second export-oriented factory in India from where telecom equipments would roll out from September-October, is betting big on India, Asia’s third biggest economy.
“We are investing an initial amount of $15 million (about Rs 100 crore) in our second factory at Chakan, near Pune,” Mats H Olsson, senior vice president and head of Asia-Pacific, Ericsson told Financial Chronicle.
He was in Pune, one of the major industrial hubs for Swedish firms, to show the new Ericsson plant under construction to the visiting Swedish prime minister Stefan Lofven. Pune is home to big Swedish firms like Alfa Laval, Tetra Pak, Sandvik, Atlas Copco, among others.
“India is a one of the top key markets for us, driving our business rapidly. It is, in fact, fourth largest market in the world and fast growing,” Olsson said, adding that the country was next only to Sweden, North America and China in terms of business.
He said the Indian arm contributed about 5 per cent of Stockholm headquartered Ericsson’s total net sales in 2015 at $29.4 billion. “In absolute numbers, Ericsson India’s revenues jumped 74 per cent to $2 billion in 2015,” Olsson said. He expects this pace of growth to continue for few years from present low base and then stabilise as the market matures.
Olsson said the Chakan facility would serve as an export hub for the company’s exports to South East Asia, West Asia and Sub Saharan African regions. The new factory will manufacture current and future products for 2G, 3G and 4G technologies and radio and microwave products.
Olsson also said the firm plans to double its head count from the present 22,000 employees in a few years as it would continue to invest in the country to tap growing demands for its range of high-tech equipment and services.
Between 2010 and 2015, the company added 15,000 employees. The bulk of the new recruits are likely to be deployed for its rapidly growing services segment in the country.
“India is a phenomenal market where the internet, smartphones and digitalisation was going faster, creating more business opportunities,” Paolo Colella, managing director at Ericsson India, said.
The company has signed another four-year contract with Airtel to expand its 3G network across eight telecom circles in the country. But the company did not divulge the deal value. This is Ericsson's first 4G network using LTE-FDD technology in Delhi. Apart from Delhi, Ericsson will deploy LTE network in four other circles.
Ericsson is the market leader on LTE technology with 40 per cent of the world's LTE smartphone traffic currently served by its network. LTE subscriptions in India are expected to reach more than 230 million by 2020, which will work out to around 17 per cent of the total subscription base.
Ericsson has three major R&D centres in India at Gurgaon, Bangalore and Chennai.