"We have set up a facility to manufacture 18 lakh sets annually at Palakad in Kerala and are open for contract manufacturing facility," BPL Telecom's director (sales) P M Jayakrishnan told reporters in Kolkata.

He said the company was in talks with Intel to manufacture hi-fi sets in the country for the US market. "Intel will provide the technology and supply chip sets, we will manufacture the sets on contract basis."

The director, however, said the talks were at a nascent stage and a deal would require more discussions.

Jayakrishnan said as of today the cost of manufacturing handsets in India was slightly higher than China, but the way Beijing's currency was appreciating, "We stand a chance to get contract manufacturing from big manufacturers in the coming days."

He said contract manufacturing became expedient on account of the large capacity. "Right now we are making 10,000 sets monthly, which will go up to 25,000 sets by March, 2005 and to 1.5 lakh sets per month or 18 lakh sets annually, by October, 2005," he said.

Commenting on the new launch, Jayakrishnan said the company now has eight models in its kitty of which six were available in the market. "We are outsourcing up to 30 per cent of components like chip sets and some other system. The balance is being done at our factory at Palakad."

The company, he claimed, was offering the entire range, from the slimmest phone ever in India (11.9 mm with flip) for Rs 4685 to 270 degree rotating camera and other features for Rs 13,495.

By January 2005, the company expects to add another 5 to 7 models, Jayakrishnan said.

He said the company has already invested Rs 15 crore (Rs 150 million) on setting up manufacturing and marketing facilities for mobile handsets and will invest a total of Rs 50 crore (Rs 500 million) by October 2005.

Asked if the company has any plan to enter the CDMA segment as well, Jayakrishnan said, "As of now we do not have any plan for CDMA, but talks are on for WLL sets."