By Kalpana Shah

Sony Ericsson said it plans to manufacture mobile phones in India through manufacturing agreements with Flextronics and Foxconn, the company’s global outsourcing manufacturing partners.

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With an eye on the local market, the initial focus will be to manufacture basic color phones and mid-level music phones. The phones will offer unique features for the Indian market, such as local content and customized keypads.

With a GSM (global system for mobile communications) subscriber base of 105.4 million, India is one of the fastest growing mobile markets in the world and offers a big opportunity to GSM phone provider Sony Ericsson.

India

The joint venture between Japan’s Sony and Sweden’s Ericsson is currently the No. 3 phone provider in India, behind Finland’s Nokia and Schaumburg, Illinois-based Motorola.

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“Local manufacturing in India will result in improved cost efficiencies and enable us to offer attractive products at even more competitive price points,” said Miles Flint, president of Sony Ericsson, in a statement.

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Dayanidhi Maran, India’s federal minister for communications and information technology, said at a press conference in Chennai that the decision to manufacture in India “is a reflection of India’s potential as a manufacturing hub of international standards.”

Business Triples

Mr. Flint said Sony Ericsson’s business had tripled last year. “India is vitally important for us. It is the fastest growing telecom market in the world,” he said. He noted that the company had a portfolio of 45 to 50 phones, all of which would be introduced in India. He also told reporters that an R&D center in India was under “careful consideration.”

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With the number of mobile phone subscribers growing by over 6 million every month, phone manufacturers are choosing not to ignore the market. In the past year, several companies have set up plants near Chennai, a southern city that is rapidly becoming a manufacturing hub for high-tech electronic equipment.

Among them are Nokia and Motorola. Nokia’s manufacturing facility, located nearby the plant where Sony Ericsson’s phones will be made, went into production in January 2006 and shipped 20 million phones as of November. While Sony Ericsson did not reveal any numbers, a few million handsets are the least one can expect every month.

Other manufacturers are spreading out as well. Elcoteq has set up a plant in Bangalore; Samsung is churning out phones in Haryana, a state nearby India’s capital New Delhi; and LG Electronics is making phones near Pune, a city near India’s financial capital, Mumbai.