A Korean company has allied with an Indian manufacturer to build pagers and paging systems in India, and directly compete with U.S. manufacturers that claim strong inroads into that nation.
Seoul-based Samsung Electronics Co. Ltd. is pooling money and expertise with Larsen & Toubro Ltd. of Bombay to produce and market telecommunications hardware in India. Samsung will own 51 percent of the new company.
The two plan to spend $44 million in the next five years, with the hope of generating $800 million in gross income. Samsung also is a 19.5 percent partner in paging operator DSS (Dalmia Samsung Sunkyong) and a 7 percent partner in MODI Paging, both of which serve India’s largest cities.
L&T builds industrial machinery, produces cement, is involved in freight and constructs civil projects; it claims annual sales of $1.2 billion. Existing L&T facilities will be used in the Indian city of Mysore. An initial plan states that Samsung hopes to build 50 paging systems this year, 500,000 pagers in 1997 and 50,000 handheld phones in 1998. By 1999, Samsung hopes to have seven local subsidiaries for a variety of products.
Sales headquarters will be in Bombay to establish a national distribution system. “L&T offers everything needed for early entry into the Indian telecommunications market,” said Samsung Electronics.
The move by Samsung is in line with its pledge to invest $629 million in India by 1999. The company builds consumer electronics and appliances in Korea; it is a member of the Samsung Group and is worth about $21 billion.
The Samsung venture faces this competition:
Illinois-based Motorola Inc. has a factory in Bangalore, which manufactures pagers for sale in India. Motorola is launching pagers in the Hindi and Gujarati languages in June. Motorola also is a partner with Arya Communications in the Indian paging operation Page Point.
North American manufacturer Glenayre Technologies Inc. says it has captured 65 percent of India’s paging infrastructure equipment market and has contracts valued at $5 million. Of the nation’s 83 networks, 54 were designed by Glenayre and use Glenayre equipment, the company said.
The company has an office in New Delhi, where it operates as Glenayre Electronics India Pvt. Ltd. through a joint venture with National Telecom of India Ltd.
Tokyo-based Casio Computer Co. Ltd. recently set up a joint venture with Bharti Telecom Ltd. to manufacture and sell pagers. Bharti is India’s largest manufacturer and exporter of telephones and other telecommunications products.
The partners have established an office in New Delhi. Casio will own 51 percent, Bharti will hold 40 percent and Japanese trading firm Mitsui and Co. will own 9 percent. The entity, Casio Bharti Mobile Communications Ltd., hopes to produce 600,000 pagers this year.
The number of paging subscribers in India could rise to 2.3 million in the next four years, according to Economic and Management Consultants International Inc. The Asian nation has a population of more than 900 million, and the government has licensed 16 operators.
Glenayre said the growth of paging in India has exceeded market expectation. “We anticipate that the market in India will continue its rapid development and will be one of the largest paging markets in the world,” said Lee Ellison, Glenayre’s international group vice president.
