India passes US to become Nokia's number-two market

India overtook the US in the second quarter to become Nokia's second-largest market.

India overtook the U.S. in the second quarter to become Nokia's second-largest market, reflecting the rapid growth of mobile phone use in the country. China remained Nokia's biggest market worldwide.

The Indian market has been growing at a fast pace. The country added 7.3 million cell-phone subscribers in June, taking the total to 185.1 million, according to the Telecom Regulatory Authority of India.

Nokia's announcement Thursday coincided with a visit to the country by its president and CEO, Olli-Pekka Kallasvuo. The company did not provide actual sales figures.

Nokia set up a manufacturing facility at its Telecom Park in Sriperumbudur, Chennai, to help tap the growth. The factory has produced 60 million handsets since it opened 18 months ago. Half of those are sold domestically, with the other half exported to the Middle East, Africa, South Asia, Australia and New Zealand, a Nokia spokeswoman said.

The move to make India a manufacturing hub is unusual. Most electronics makers have avoided manufacturing goods in India for export, citing a poor infrastructure.

The handset factory employs 4,700 staff. The Nokia Telecom Park will also house seven of Nokia's component suppliers, which are investing US$350 million in manufacturing facilities there. Two of the suppliers have already started production, and the park will employ over 30,000 people when it is fully operational, the spokeswoman said. Nokia also set up a design studio in Bangalore to provide cultural input for the design of mobile phones for India.

China remains the world's biggest mobile phone market with around 500 million subscribers.

India produced nearly 31 million mobile phones last year, Gartner estimated in June. The research company expects volumes to grow at a compound annual rate of 25 percent through 2011.

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