Global telecom gear makers wary of TRAI's recommendations on boosting indigenous manufacturing

While domestic telecom gear makers have applauded regulator TRAI's recommendations on boosting indigenous manufacturing of products used in telecom networks, global companies say there's little to cheer about.

Global telecom companies, according to The Economic Times, believe the Telecom Regulatory Authority of India's (TRAI) plan to push local manufacturing will not be feasible 'in [the] absence of economies of scale and a supporting components ecosystem.'

“If the government is serious about boosting indigenous telecom gear production, it needs to first incentivise component manufacturing in a big way in India so that the cost of locally churning out finished telecom products comes down,” a senior executive at a global telecom company was quoted as saying by the newspaper.

The regulator's recommendations - 18 in all - issued on 3 August are aimed at transforming the telecom manufacturing sector from being "import-dependent" to a global hub of indigenous manufacturing. TRAI noted that while telecom services have grown at a scorching pace, telecom equipment manufacturing has not kept up.

TRAI has recommended that India must aim to achieve the objective of 'net zero imports of telecommunication equipment' by 2022.

Representational image. ThinkStock.

Representational image. ThinkStock.

"The Trai recommendations to promote local telecom equipment manufacturing is a welcome move by the regulator. The aim to make India net zero importer of telecom equipment by 2022 is particularly noteworthy," Sanjeev Kakkar, vice chairman, Telecom System Design and Manufacturing, said in a statement last week.

"It is now critical that these recommendations are implemented in true spirit for the benefit of the domestic manufacturers and thereby the country," Kakkar said.

The watchdog has favoured the creation of a Telecom Research and Development Fund with an initial corpus of Rs 1,000 crore to give a fillip to research, innovation, design, testing, certification and manufacturing of indigenous telecom equipment.

The regulator has also asked the Department of Telecom (DoT) to consider setting up a Telecom Entrepreneurship Promotion Fund (TEPF) and a Telecom Manufacturing Promotion Fund (TMPF). The recommendations also pitched for the creation of a Telecommunication Equipment Development Board (TEDB) under the department for faster decision making on funding and incentives.

TRAI has called for the streamlining of permissions for trials or pilots of new technologies or products. "Alternate Dispute Resolution Framework for time bound resolution of patent licensing disputes should be institutionalised in the country," TRAI said. Mandatory testing and certification of telecom equipment in the country should be started at the earliest, it said.

The regulator has recommended that the progress of indigenous telecommunication equipment manufacturing in the country be monitored in the Telecom Department at least at the level of the member, Telecom Commission.

"Of prime value is TRAI's suggestion that the local manufacturing be looked after at the level of a member in Telecom Commission. In fact, earlier Member Production was solely responsible for the promotion of local manufacturing. Telecom Equipment Manufacturers Association of India (TEMA) requests that this post be filled up immediately," NK Goyal, Chairman Emeritus, TEMA, said last week.

With inputs from PTI

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Updated Date: Aug 06, 2018 15:52:50 IST

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