Depite a Humongous Growth in The Telecom Sector, The Country has failed to build an Ecosystem that Promotes Telecom Manufacturing, Forcing Operators to Import most of The Equipment for their networks.
The latest joke doing the rounds in Electronic Niketan (IT and Telecom Minister’s Office) is that the import bill for telecom equipment will soon surpass petrol’s. It’s a telling comment on the Indian telecom industry, which has witnessed exponential growth in the last one decade but failed miserably on the manufacturing front.
Telecom industry in India has come a long way from having 5.07 million subscribers in 1991 to being the world’s second-largest market with a subscriber base 811.59 million by the end of March 2011. Ironically, in the year 2009-10, Indian products were able to meet just 3% of the telecom equipment demand in India. Equipment used for expansion of telecom networks was imported mostly from Europe and China. The figures highlight that the contribution of home-grown manufacturers to the great telecom success story has been negligible. Telecom manufacturing is one of the key areas for the government as well as telecom regulator to seriously look at, as the demand and supply chain will continue to widen. As per a TRAI report the subscriber base is expected to touch 1.5 billion by 2015, considering that India will continue to have 10% of the global market share.
Recently TRAI recommended to Department of Telecommunications (DoT) that manufacturing must be spurred to achieve the target of meeting 80% of the domestic demand. The recommendation was a little ambitious than the target for the XI Five Year Plan, which envisaged meeting 75% of the telecom equipment demand and handsets. If accepted in its present form, a cap on buying equipment manufactured outside the country cannot be ruled out. “The telecom ecosystem has so far failed to adequately spur the manufacturing segment. The demand and supply gap is widening. We need to have a proactive approach towards manufacturing of telecom equipment” says N.K. Goyal, Chairman, Telecom Equipment Manufacturers Association (TEMA).
India’s information and communications technology equipment consumption is expected to touch 11.5% of the global market by 2015 from the current level of 5.5%, as per combined estimates of ISA-Forst & Sullivan, CII and others. A TRAI report says that requirement of equipment for 3G, LTE and WiMAX services alone would be around Rs 232.85 billion by 2015-16. The report predicts that by the year 2020, the combined demand would be worth Rs 264.56 billion. But the question is: Can India become the next telecom manufacturing hub and will it be able to meet 80% of the domestic demand for telecom equipment by 2020? People in the industry believe that if China can do it in a span of 10 years than India can do it as well. But the road ahead for telecom equipment manufacturing appears full of pitfalls.
Telecom industry in India has come a long way from having 5.07 million subscribers in 1991 to being the world’s second-largest market with a subscriber base 811.59 million by the end of March 2011. Ironically, in the year 2009-10, Indian products were able to meet just 3% of the telecom equipment demand in India. Equipment used for expansion of telecom networks was imported mostly from Europe and China. The figures highlight that the contribution of home-grown manufacturers to the great telecom success story has been negligible. Telecom manufacturing is one of the key areas for the government as well as telecom regulator to seriously look at, as the demand and supply chain will continue to widen. As per a TRAI report the subscriber base is expected to touch 1.5 billion by 2015, considering that India will continue to have 10% of the global market share.
Recently TRAI recommended to Department of Telecommunications (DoT) that manufacturing must be spurred to achieve the target of meeting 80% of the domestic demand. The recommendation was a little ambitious than the target for the XI Five Year Plan, which envisaged meeting 75% of the telecom equipment demand and handsets. If accepted in its present form, a cap on buying equipment manufactured outside the country cannot be ruled out. “The telecom ecosystem has so far failed to adequately spur the manufacturing segment. The demand and supply gap is widening. We need to have a proactive approach towards manufacturing of telecom equipment” says N.K. Goyal, Chairman, Telecom Equipment Manufacturers Association (TEMA).
India’s information and communications technology equipment consumption is expected to touch 11.5% of the global market by 2015 from the current level of 5.5%, as per combined estimates of ISA-Forst & Sullivan, CII and others. A TRAI report says that requirement of equipment for 3G, LTE and WiMAX services alone would be around Rs 232.85 billion by 2015-16. The report predicts that by the year 2020, the combined demand would be worth Rs 264.56 billion. But the question is: Can India become the next telecom manufacturing hub and will it be able to meet 80% of the domestic demand for telecom equipment by 2020? People in the industry believe that if China can do it in a span of 10 years than India can do it as well. But the road ahead for telecom equipment manufacturing appears full of pitfalls.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
