Videocon in talks to buy Motorola cell group

Indian electronics and appliances maker Videocon is making good on its earlier offer to purchase Motorola's hurting Mobile Devices business. According to Friday's reports, the talks between the two companies are at initial stages, says Videocon chairman and managing director Venugopal Dhoot. Videocon stands to benefit from the deal, as it plans on launching telecom services through its Datacom subsidiary in Indian markets this August.

Videocon hopes to capture a 10 percent market share of Indian's cellular phone business within five years, and the Motorola mobile acquisition would help it reach that goal, according to claims. It already has a license for all of India, with spectrum in three circles and in waiting for the remainder. The company says its technical links with other companies would allow it to roll out 3G products soon after the government's approval of the high-speed data network.

Analysts estimate Motorola's Mobile Devices division, which holds a 15 percent global market share, is worth about $3.8 billion. Since the start of last year, however, Motorola has cut around 10,000 jobs in a bid to stem mounting quarterly losses that have had roots in rapidly dwindling cellphone marketshare.

Filed under: Investor, industry
Other story tags: Motorola, Videocon