The Bangalore-based BPL Group is planning to launch locally manufactured cellular handsets by August.

Priced at around Rs 4,500, the BPL handset will compete with the likes of Nokia, Motorola, Sony-Ericsson and Siemens for a pie of the Indian handsets market.

BPL handsets would be the second locally manufactured handset in the country after a Chennai-based entrepreneur V K Munoth launched his mobile phones at a price range of Rs 7,000-12,000.

While BPL executives confirmed the move, they refused to give details of the project. Industry sources said that the handset will be part of the BPL consumer durables stable and will be manufactured at its Bangalore unit.

Sources said that the company had tied up with Japanese electronics major Sanyo for providing lithium batteries for the handset. The company is also planning to launch handsets at higher price range.

The move is aimed at tapping the growing cellular market in the country. In June, nearly 1 million new subscribers had joined the cellular bandwagon taking the total mobile subscriber base to over 15 million.

Analysts point out that most manufacturers would consider 1 million new handsets as a threshold for setting up a manufacturing base in the country. The cellular subscriber base in the country is expected to cross 50 million in the next five years.

According to Pankaj Mohindroo, president, Indian Cellular Association, nearly 9-10 million handsets are sold in the Indian market every year. Of this, 50 per cent is cornered by the gray market.

However the legal market has seen a growth of over 1,100 per cent in the last one year.