India is one of the most important markets in the world for mobile device manufacturers and carriers alike and the reason for this is because it is experiencing high levels of growth. The population are starting to go online and the smartphone, especially, is an ideal device for this compared with the desktop computer or laptop. Smartphones are small, relatively cheap and require comparatively little in the way of infrastructure: the Indian smartphone market is expected to be the second-largest in the world by 2018, overtaking North America, despite various overheads that the country suffers from – critically in the infrastructure perspective. In a recent visit to Delhi, Foxconn’s Chief Executive Officer Terry Gou, gave a frank interview to NDTV Gadgets. Essentially, Terry is willing to open at least ten manufacturing plants in India in the next five years but needs a push from the Indian government.
Foxconn’s plans are to set up factories in rural parts of india and transform the area, bringing employment for skilled workers and engineers. As part of the process, Foxconn will invest in local infrastructure but it also needs the Indian government to improve this too. Terry said this on the matter: “Your [Indian] infrastructure will be a big limitation. Today I was told it will take twenty minutes to reach you, but it took one hour twenty minutes because it rained. Power is a problem. If there is a power cut, the entire factory has to stop working. Power, water, skilled workers, all these problems need to be solved.” Later in the interview, Terry made reference to the poor mobile connectivity across India, “…in China, in two years, we are 98 percent 4G. In India, your 4G is just 1 percent. And your 3G keeps switching to 2G… The spectrum is so expensive here, and the ARPUs are so low. Your companies spend all their money on spectrum when they need money to improve infrastructure also.”
What’s changed for India? A new government with a new, more flexible approach to business and a simple “Make In India, Skill India” slogan plus supporting policies. As such, and whilst Terry would not admit what brands Foxconn is planning on forming partnerships with, it appears that there will be a bias towards local (Indian) brands. “I don’t care what brands I make here; you ask about Apple, but we will make the products where it makes sense. We have to look at a lot of different factors before deciding what to make. But we will work with local brands and help them with design, and manufacture components locally, so that Indian brands can also start to export, right now India does not export.”
Another benefit to Foxconn arriving in India is how the manufacturer is planning to set up small business incubators in Delhi, Mumbai, Bengaluru, and Hyderabad. “We will work with Indian businesses and help them grow, but your government must also help them grow.” Indian consumers have access to international companies and services such as Google, Facebook, WhatsApp; there are no home-grown alternatives. Foxconn’s ambition is to help fledgling Indian companies design and market local services for the Indian population.