NSN Gains Ground

India is gaining ground as the telecom manufacturing hub both for India consumption as well as export market. Due to its proximity, India can export telecom gears to Saarc countries like Sri Lanka, Bangladesh, Nepal, Bhutan, Afghanistan, Maldives, and African countries. Markets like Bangladesh, Sri Lanka, Middle East, and African countries are opening up in a big way and Indian manufacturers are actively looking to export their products to respective markets due to the proximity of the manufacturing base to all these markets.

With market increasing in all these regions, there is an excellent growth story for Indian telecom manufacturers in the country. As per statistics, Saarc mobile population is close to 1.1 bn and this is planned to show an increase of minimum 15-20% in coming years. Even in Africa there is lot of growth opportunity with respect to infrastructure deployment.

According to Voice&Data, India's telecom equipment market is estimated to be `117,039 crore of which carrier equipment is to the tune of `58,294 crore. If we include Saarc, Middle East and Africa market, the market for telecom equipment is still bigger and Indian manufacturers can play an active role with their entire suite of products.

In India, we have a mix of carrier equipment manufacturers like Ericsson, Nokia Siemens Networks, ITI and EMS players like Foxconn, Flextronics, Sanmina, Solectron, Jabil Circuit, and others which have a manufacturing base in the country and these cater to the telecom market. Chinese companies like ZTE and Huawei are also planning to set up their manufacturing base in the country. To cater to Indian and export demand, Nokia Siemens Networks (NSN) has recently expanded its manufacturing facility. For NSN, this is the third expansion in the last 2-and-1/2 years. In terms of production area, the Chennai facility is around 13,500 sq m and it stands third among all manufacturing facilities of NSN worldwide. It is also one of the two volume factories among 10 factories that NSN has globally. The other volume factory is located in Suzhou in China. With the increase in production area, the company has also increased its product line to 33 from Chennai facility.

In terms of built up area, the NSN facility has been expanded from 35,000 to 55,000 sq m. On the other hand, Ericsson facility in Jaipur has a built up area of only 21,000 sq m with a total area of 81,000 sq m. So, as per comparison, NSN facility in Chennai leads private infrastructure manufacturing in the country.

“This expansion will strengthen India's position as one of our major manufacturing hubs in the Asia Pacific,” said Ashish Chowdhary, head of India and customer operations East, Nokia Siemens Networks.

Ericsson's manufacturing facility is an old facility set up in 1994 at Kukas, Jaipur and the focus was on wireline hardware manufacturing. The facility is a multi-product supply site with capability in node, module, PCBA and repair. In the last 2 years, the site has established 2 SMT lines, and has the capacity to cover both domestic market demand and exports. The company is now geared to supply 2G, 3G and 4G (TDD-LTE) equipment and manages production lines providing equipment for radio access network, core network, transmission solutions, and modules.

Daniel Sundelius, head, Ericsson Supply Site, Jaipur, Ericsson India said, “Ericsson's Jaipur facility is one of the 4 worldwide multi-product manufacturing facilities globally, and with the recent expansion of Jaipur plant and subsequent increase in production, the company is considering exporting equipments to nearby markets in future”.

The expansion of NSN's facility will significantly increase its manufacturing capacity with respect to 2G transport, 3G filters, microwave, LTE-ready 3G base stations, multi-radio, and FlexiPacket radio. The company is planning to export approximately 37% of its production capacity to US, Europe, and Asia.

The Chennai facility has rolled out more than 860,000 units to date and is the steepest ramp up says Herbert Merz, head, operations and member of the NSN executive board, Nokia Siemens Networks.

In terms of investment, the company has invested till date $75 mn and plans to continue investment, added Merz.

To take advantage of India opportunity, the company has gone for local sourcing of product and the focus is on metal parts, interconnect, mechatronics, diecasting and packaging. Till date, the company has done local sourcing to the tune of $300 mn. The company is planning to increase sourcing of component locally as and when the other supply chain gets ready.

In order to give a big boost, the company is the first in India to get ISO 27001 certification for telecom manufacturing in the country, and will help in measuring the quality of an organization's management systems in terms of information security so that superior products with high-end security features can be produced more cost-effectively.

Pravin Prashant
pravinp@cybermedia.co.in