Siemens AG is looking at setting up a cell phone manufacturing facility in India as a part of the German conglomerate's long term strategy.

Peter Gartenberg, executive vice president, information & communication mobile, said, "With a GSM subscriber base of around 17 million and a penetration rate of merely 2 per cent, India is poised for a major growth. We expect the subscriber base to be over 45 million by 2005-06."

"We may set up an integrated mobile phone manufacturing facility in India if the growth projections are met. For a manufacturing project to be financially viable, 10 million handsets of single brand should be the minimum capacity. We have 10 factories in India and are no strangers to manufacturing in this country. Also, India has already established itself as a high profile manufacturing location," Gartenberg added.

Currently, the domestic cellular phone industry is only fed with imports.

Siemens AG's handset manufacturing units are spread across China, Germany, Brazil and Mexico.

Siemens has already announced its research and development centre at Bangalore as the global development centre for network software. The unit has been given global lead for the development of GSM and 3G/ UMTS.

According to Gartenberg, India has been declared as the focus market and the company is looking at acquiring a 15 per cent market share from around 6 per cent now in a year.

As per the group's India specific strategy, the company has already introduced a portfolio of seven mobile phones positioning each at different price points with high-end features as unique selling proposition. It has also put in place a nationwide distribution network of over 5,500 retail outlets.