Ericsson dumps Bangalore, picks Chennai

Ericsson plans $100 mn R&D centre in Chennai

Rediff

Swedish telecom equipment supplier Ericsson on Monday announced setting up a R&D centre in Chennai and an investment of $100 million to upgrade the manufacturing facility in India.

The existing Radio Base Station manufacturing facility in Rajasthan is being upgraded to manufacture mobile switching centre and base station controller to further support the Indian market, Ericsson worldwide CEO Carl-Henric Svanberg told reporters in Mumbai.

Ericsson will set up a new R&D centre in Chennai and the centre will perform R&D in cutting edge areas such as service layer, value added services, he said.

He said Ericsson's investment in its Indian operation would go up beyond $100 million annually as the company is poised for expansion.

He declined to quantify the investment, saying this would be in line with the demand and growth of the sector. Given the potential, India could be among the list of Big Growth nations in next 7-10 years, Henric added.

Commenting on the decision to select Chennai as location for setting up R&D centre instead of Bangalore where they have an office, Ericsson head of Indian operations Mats Granyrd said Bangalore is a congested place. Besides, it also has a large number of MNCs as a result the employee attrition rate is high.

Henrik, however, declined to comment on the infrastructural status in Bangalore.

On Ericsson's plans in the next generation 3G mobile services, Henric said it is important but there is no great rush to run for that. We have to see the availability of spectrum and the particular band allotted to the GSM operators.

Part of the investment announced would go for setting up of global services delivery centre to strengthen Ericsson's managed services segment under which the company manages networks of service providers.

Ericsson had entered into contract with Bharti to manage their networks across various circles in terms of expansion of network along with demand as well as maintenance.

For the R&D centre, Ericsson would continue to have Wipro and TCS as software technology partners for their operations in India as well as in Asia Pacific.