Telecom Lead Asia: Does telecom gear makers in China and Taiwan face red card from Indian telecom ministry?
To meet goals set for the National Telecom Policy 2012 (is it 2013?), India has included the US, Israel, Japan, South Korea, Belgium and Sweden in an internal list of six strategically important telecom partner countries.
The list does not include China and Taiwan, two of the world’s biggest telecom equipment manufacturing zones, Economic Times on Monday reported.
In fact, telecom equipment makers from China and Taiwan have prominent positions in Indian wireline and wireless industry. Since India’s telecom sector also depends on components from these counties, it will be difficult to do business in India if the telecom ministry does not consider manufacturing companies in these two nations.
According to a document prepared by Booz & Company for COAI suggests that India will account for less than 3 percent of the global telecom equipment market by 2020 ($17 billion). Self-reliance is not a viable tool to drive globally competitive economies of scale; further, no country is wholly self-sufficient in such a technologically complex industry.
Further, Indian manufacturing would require to grown by 100 percent CAGR over the next 5 years to meet TRAI mandates on telecom.
Kick starting local manufacturing – aimed at global markets- calls for developing specialized telecom clusters while addressing infrastructural, fiscal and legal issues, including labor laws.
Currently, the lack of a local cluster imposes an effective 3 percent higher end cost on account of freight etc; government may wish to consider a time bound (5 years) incentive to overcome this and kick start the coalescence of a cluster in India
Without local IC fabrication facilities, not more than 15-20 percent value addition is possible in India even over the next 3-4 years. To go beyond that figure requires for India to promote the entire electronics cluster.
An earlier internal strategy proposal by the Department of Telecommunications (DoT) suggests restricting imports of certain kinds of telecom equipments. This suggested strategy could derail plans of Chinese telecom giants Huawei and ZTE. The internal proposal will limit Chinese imports to devices and in telecom manufacturing, and bar their presence in broadband networks, which are viewed as strategically sensitive.
Interestingly, department of telecommunications (DoT) has convened a meeting on February 13 with FICCI, CII, Assocham and industry bodies representing the country’s network gear makers, Internet service providers, GSM, CDMA and dual-technology companies to frame strategies for broadening telecom ties with the six priority markets.
The meeting is ahead of telecom minister Kapil Sibal’s visits to these regions to attract foreign investment.
Business associations will discuss ways to enhance bilateral cooperation with these countries on telecom network security, developing technologies for location-based services, creating an enabling environment for attracting maximum foreign investment in telecom equipment manufacturing, ways to improve spectrum utilization efficiency, etc.
National telecom advisor RK Bhatnagar will chair the meeting.
Economic Times report says the meeting will look at ways to increase technology collaborations for content development for mobile applications and suggest ways to enhance Indian representation in intra-government telecom agencies like ITU, the Asia-Pacific Tele-community and the Commonwealth Telecommunications Organization (CTO).
At a time when Europe is reeling under a financial crisis and id going extra mile to attract FDI, it is quite interesting to note that India’s Honourable Minister is embarking on a tour of European countries to attract investments and technology. Europe is chasing China for money and India is chasing Europe for the same.
Kindly check the grammar of the article
SJ: You are correct. It is time for India to stop fighting with China. If Apple CEO is trying to build a strong market in China for Apple iPhones and iPads, India should encourage Chinese equipment supplies (after checking security related issues, if any) and slowly build eco-sysstem locally as well. Several US companies including Apple source equipments from China. India need to re-think about its policies.