Samsung to boost mobile capacity in India by 2008

NEW DELHI, June 14 (Reuters) - Samsung Electronics Co. Ltd. (005930.KS) plans to expand its mobile phone production capacity in India, the world's fastest-growing cellular market, by as much as six times by 2008, a company official said on Thursday.

H.C. Ryu, managing director of Samsung Telecommunications India, a wholly owned unit of the South Korean firm, said the new capacity may come up at its mobile phone manufacturing unit in Manesar in the northern state of Haryana, or in Noida on the outskirts of Delhi or Chennai in southern Tamil Nadu.

"Our plant in Haryana has a capacity of 1.5 million handsets per year. We are planning to expand up to 5 to 10 million... within next year," Ryu said on the sidelines of a news conference.

Samsung aims to lift its share of India's coloured GSM handset market to "double digits" by December, from 7 percent now, he said.

The total GSM handset market in India is 4.5 million handsets a month, Ryu said.

Samsung launched three metal series phones, priced between 12,000 rupees ($293) to 15,000 rupees, in New Delhi on Thursday. Ryu said fresh demand for handsets would come from rural India as the urban markets were saturated.

Teledensity in rural India is as low as 1.84 percent, compared with 58 percent in the big cities where growth has begun to flatten, an industry body said in a study.

Samsung also exports handsets from India to Dubai, Singapore, Malaysia, Vietnam, Indonesia, Philippines and Thailand.

"Last year, 50 percent was exported and 50 was for local. This year the local portion has increased to 60 to 70 percent. We will maintain that," Ryu said.

The company, which started production in March 2006, expects to produce 2 million handsets in the year to March 2008 from 1.2 million handsets in 2006/07. It expects to boost capacity by December 2008.

Samsung competes with Nokia (NOK1V.HE), Motorola MOT.N, Sony Ericsson in India, which added more than 5 million GSM customers in May, taking the user base to 130.6 million. ($1=40.9 rupees)