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Thomas K. Thomas

New Delhi, Aug. 31 US-based Intel Capital may emerge as one of the bidders for a stake in the factories owned by ITI Ltd, as part of its strategy to spread WiMax technology in India.

Intel is likely to put together a consortium of companies that could be interested in using the ITI facilities for manufacturing WiMax-based network hardware and consumer premise equipment.

Highly placed sources said that one of the issues that could determine Intel’s participation is whether the Government is prepared to increase the quota for products manufactured by ITI.

At present BSNL and MTNL buy only 10 per cent of their total requirements from ITI. Sources said that multinational firms such as Intel could get interested if the Government ensures that at least 30-40 per cent of Government run agencies such as BSNL, Railways and Defence buy equipment from the Indian manufacturer.

When asked, Intel Capital’s Vice-President, Mr Sriram Viswanathan, refused to comment on a question specific to ITI. But he said that India had an opportunity in promoting local manufacturing if the Government provided enough incentives.

Apart from Intel, Chinese manufacturer Huawei and Franco-American Alcatel-Lucent are interested in the ITI factories. But security concerns related to Chinese manufacturers would come in the way of Huawei’s plans. Alcatel-Lucent, which already has a partnership with ITI for supplying GSM equipment to BSNL, is a strong contender.

Alcatel-Lucent is also strong in the WiMax and IP based telecom equipment market for which ITI’s existing factories can be used.

The Government proposes to set up three special purpose vehicle companies for divesting stake in three of the six manufacturing plants owned by ITI. The three plants are located in Rae Bareli, Naini and Bangalore and are involved in producing WiMax modems and optical transmission equipment.

More Stories on : Telecommunications | Mergers & Acquisitions | PSU

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