Reliance heads for handsets

Indian industrial giant Reliance Industries now has mobile handset ambitions

By CNN's Kristie Lu Stout

MUMBAI, India (CNN) -- Indian industrial giant Reliance has plans to break into the mobile handset business.

Reliance, buoyed by an ambition to become a telecommunication giant in the world's second most populous nation, could emerge as a major player in India's burgeoning mobile sector.

Reliance plans to assemble 2 million CDMA compatible mobile phones and set-top boxes a year, according to India's Economic Times.

Sources told the Economic Times that the cellular phone business could be an assembly operation with the components sourced from China and Korea.

The handsets would be sold to consumers at $53 to $64 each, much lower than the $214 charged by other manufacturers.

A surging mobile market

Reliance Infocom is leading the group's IT ventures by laying a broadband network in 115 towns and cities throughout India.

Reliance owns 45 percent of Reliance Infocom, a venture analysts value between $3 - $4 billion.

The foray into call centers could make Reliance a major player in what is a booming sector.

The Cellular Operators' Association of India (COAI) forecasts 100 percent Indian mobile market growth year on year until 2005.

The mobile market in India grew 93 percent in the last year to reach a total of 3.42 million subscribers.

Researchers at COAI say the surge in wireless usage in India can be attributed to the emergence of a more favorable licensing environment that in turn encouraged a fall in airtime rates.

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