MOTOROLA: Moto gears up for 3G

Motorola was firing all guns in the FY 2004–05. The company did well in wireless infrastructure business, both in CDMA as well as GSM. With a strategy clearly chalked out to gain higher market share in all the segments where Motorola is doing business, they did particularly well in the infrastructure business. However, with new models and renewed market strategy the mobile handsets could not contributed significantly in the India revenue for the company. The overall revenue of the company jumped almost 40 percent to touch Rs 2,322 crore in FY 2004–05 from Rs 1,649 crore in FY 2003–04.

This year Motorola also announced the launch of Motorola Labs India with the official opening of an applied research lab in Bangalore. This lab, the 11th for Motorola, augments company's existing India R&D infrastructure of more than 1,700 software engineers. Motorola's R&D investment in India has grown to $85 million, up from approximately $50 million in 2002. This investment would be raised by 10–20 percent per year in the next couple of years.

India Head: Amit Sharma, vice president, regional management South & South East Asia global relations and resources management
Area of Operation: Mobile phones, Mobile infrastructure, Enterprise solutions
Address: Motorola India, Motorola Excellence Centre, 415/1, Mehrauli Gurgaon road, Sector-14 Gurgaon, Haryana 122001
Tel: +91 124 5191501
Fax: +91 124 5083155
WEBSITE: www.motorola.com


V&D estimates	CyberMedia Research

Highlights

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Major expansion and new network deal from Tata Teleservices for 16 circles

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Motorola's revenue from handsets business in 2004–05 was Rs 755 crore

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Launched sub Rs 2,000 handsets to be distributed through the operators
l New handset marketing strategy to improve market share

On the wireless infrastructure side, Motorola completed the implementation of orders from BSNL, MTNL, and Tata Teleservices. The combined value of these deals was $307 million and was announced in early 2004. The BSNL part was for one million line expansion, and for MTNL it was four lakh, each in Delhi and Mumbai. The Tata Teleservices part was to expand the CDMA2000 1 X mobile phone network in Delhi, Gujarat, Maharashtra, and Mumbai for $43 millon.

The biggest break for Motorola in terms of new order again came from Tata Teleservices. The deal was finalized in June 2004. This project is for the expansion of Tata's CDMA network in 16 of the circles. Though there has not been any formal announcement of the deal, VOICE&DATA estimates the project to be worth over $145 million and for over 5.5 million lines.

Motorola last year carried out trials and implemented EDGE on Hutch networks. Apart from Hutch, the company has implemented GPRS for Spice and BPL networks. With 3G being evaluated by most of the GSM vendors, Motorola has been initiating talks and discussion with Bharti, Hutch, MTNL, and BSNL for migration to the next generation. On the CDMA side also, they have been exploring business option with Reliance.

Last year Motorola also launched its low cost handsets and got an order from the GSM association. In India also the company introduced the below Rs 2,000 phones and has joined hands with the service providers to distribute these handsets. Otherwise also the company was very aggressive on its handset marketing and launched handsets across the market segments. Motorola has been gaining mobile handsets market share globally, trying to catch up with Nokia on all fronts but it is still a long way in India. With acceptability of Nokia phones being very high in India, eating in the market share would be difficult. However, 3G environment may throw some surprises both in infrastructure and handsets market this year. Thus, for Motorola, the next year would be crucial for gaining leadership position in India.

"Last year our growth rate was exceptional and exceeded the market rate"

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