Karbonn to Invest Rs. 800 Crores on Mobile Phone Production in India

Domestic mobile phone company Karbonn has earmarked an investment of Rs. 800 crores over a period of next three years for manufacturing mobile phones in India.

"We will be investing up to Rs. 800 crores on mobile devices manufacturing in the next three years. Production at our Noida plant in UP and Telangana plant will start within the next two quarters," Karbonn Mobiles Executive Director Shashin Devsare told PTI.

"In a year, we expect local production to meet 60-70 percent of our domestic market requirement," he added.

According to Cybermedia Research report of 2014, Karbonn Mobiles was one of the main contenders for the third position in terms of market share in mobile devices business in India.

"We are not dependent on external funding. We are the only brand that has announced two manufacturing units. Out of the total, Rs. 450 crores has been allocated for our Telengana plant and Rs. 100 crores we have invested in setting up Noida assembly unit," Devsare said.

Karbonn is a joint venture between Jaina Group and Bengaluru-based electronics manufacturing firm United Telecom Limited.

The company will be looking at making entry level phones priced in the range of Rs. 2,000- 7,000 a unit.

Mobile phone companies are looking to make handsets in India after the government in its budget increased duty for imported devices.

Devsare said that companies wants to indigenise mobile phone production completely but due to weak component base, Karbonn will have to import components.

"We are going to look at full fledged manufacturing in India but we have to look at sourcing components from abroad because most of the components are not available locally. Lesser we will be dependent on imported components, better it is going to be for us," he said.

Talking about threat to sales from new companies selling smartphones at very low prices and gaining market share quickly, Devsare said that Karbonn is not in to this kind of quarterly game but looking at markets which uses mid and low-end smartphones and those who prefer to operate mobile phone in their local language.

"It is a game of those who are trying to get valuations and not confident about their internal accruals to fund their growth plan. Karbonn has always grown on internal accruals. If you have to make in India then you have to spend money earned from India. Not necessarily from foreign investors," Devsare said.