Computer and bicycle maker Xenitis announced that it has floated a company Xenitis Telecommunications in order to make entry into the mobile handset business.

The company said that it will launch the cheapest mobile handset in the Indian market by August 2008, at a price of Rs 499.

Mr. Santanu Ghost, Xenitis chairman, said that the company would invest around Rs 250 crore in the handset project.

“We are looking at all possibilities - selling the mobile phone under our brand, acting as OEM for major mobile phone manufacturers, as well as supplying to telecom service providers for their bundled packages. The price range of our mobiles would be Rs 499-2,000,” Mr. Ghosh said.

He further stated, “In the next two years, there will be 500 million new connections in the country. We want to have a good share of that.”

Mr. Ghosh said that the group had already received orders for supplying 1.6 lakh mobile handsets to telecom service providers and some leading mobile phone makers.

Xenitis would acquire an additional 10 acres of land for the handset plant near the subsisting facility of group flagship Xenitis Infotech.

Mr, Ghosh also told that the company’s growth plans are likely to create additional employment for 650 people with in the next six months.

On Tuesday, the company rolled out its low-end laptops at a starting price of Rs 14,990.

The group is targeting a turnover of Rs 2,000 crore in the existing fiscal (2008-09).