It will invest an estimated US$100 to US$150 million along with its key suppliers over four years once the official formalities are completed within months.

"The factory would be an integral part of our global manufacturing network and help fulfil growing demand as mobile communications have become increasingly affordable and available to more people in this diverse region," remarked Pekka Ala-Pietilä, Nokia's president, to the press during his visit to India yesterday.

Nokia foresees ramping up the factory gradually and the work force reaching approximately 2,000 employees when it achieves full-scale production. The final investment evaluation process is ongoing and is expected to be completed during the first quarter of 2005.

Nokia's president said India's position at the heart of a rapidly growing mobile communications region makes it an attractive option for establishing new manufacturing facility. Growing mobile penetration in the Asia-Pacific region is expected to be a major contributor to the global mobile subscriber base surpassing the two billion mark in 2006.

Nokia currently has nine mobile device manufacturing facilities around the world. In India, Nokia is the clear mobile phone market leader.

It maintains sales, marketing, customer care, and research and development sites in the country. The Indian factory will be the very first investment in manufacturing of the Finnish telecoms giant in South Asia.

In another development, The Telecom Regulatory Authority of India (TRAI) has recently reported that the country has now more mobile phone users than fixed telephones. For mobile segment 1.53 million subscribers have been added during October 2004 as compared to 1.84 million in September 2004.

The mobile additions consist of 1.20 million GSM (Global System for Global Communications) subscribers and 0.33 million CDMA (Code Division Multiple Access) subscribers. The Indian regulator says at the end of October there were 43.9 million fixed-line users in the sub-continent while there were 44.9 million mobile phone subscribers. Furthermore, that number is expected to go on rising at the rate of adding at least half a million new monthly customers in foreseeable future.

In a statement commemorating India's truly astonishing feat the TRAI said, "This unprecedented growth has been due to the fact that the mobile tariffs in India are the lowest in the world."

Some Indian mobile phone companies are charging call rates as low as two US cents a minute, which has made mobile phone popular among many millions of India's poor population. "Now they can afford a basic mobile handset and a limited pre-paid tariff and are thus able to simply by-pass the sluggish, expensive and bureaucratic excesses of the state-run fixed-line operator," commented Martyn Warwick, editorial director of London-based telecomtv.com.