India's Videocon Eyes Motorola's Phone Business

Videocon Industries, a large Indian vendor of consumer electronics equipment and home appliances, has expressed an interest in bidding for Motorola's mobile handset business.

The Videocon board is meeting Wednesday to discuss its acquisition strategy, an informed source said.

Videocon is interested in buying Motorola's handset business and hopes to sell the mobile phones through its consumer durables retail chain in India, Videocon Group chairman Venugopal Dhoot told Indian newspapers on Wednesday.

The company also plans to enter the mobile services market in India, building its own GSM (Global System for Mobile Communications) network.

There's still room for growth in the Indian mobile market, which has been adding more than 8 million mobile subscribers a month. The total number of mobile subscribers in the country was 251 million at the end of February, according to the Telecom Regulatory Authority of India (TRAI) in Delhi.

Motorola will split into two companies, one making mobile devices and the other making network infrastructure, the company announced last month. After the split, which is expected to happen next year, the companies will operate separately and be publicly traded, Motorola said.

Videocon could transfer Motorola's manufacturing facility to India to take advantage of India's lower costs, Dhoot told the Business Standard.

Indian companies that were initially focused on the domestic market have recently shown interest in buying companies that help them acquire new brands and markets abroad. India's Tata Group company, Tata Motors announced last month that it was acquiring the Jaguar and Land Rover brands from Ford for US$2.3 billion.