Telecom manufacturing in India, is it enough?





India has 601.73 million active wireless users, 34.18 million wireline users and 12.50 million broadband users at the end of July 2011.






Though investment in telecom manufacturing is happening, those investments are not enough to address the consumption of 12-15 million handsets a month and wireless equipment capex plans of Indian mobile operators. Their capital investment in the next 5 years would be around Rs 270,572 crore. The gross revenue of the service providers in India in 2009-10 was Rs 116,803 crore.





Recently, Samsung has announced investment of $70 million to triple its mobile manufacturing capacity in India at its Noida facility. The manufacturing capacity will go up from 12 million per year to 36 million phones. This expansion will generate 1500 new jobs in India.





Then, there is an expansion of 20,000 square meters at Nokia Siemens Networks manufacturing facility at Chennai (Oragadam).Investment is being continuous at Global Network Solutions Center (GNSC) in Chennai and now Nokia Siemens Networks supports ten times more subscribers on behalf of operators around the globe than in 2007 when it was launched.





Besides Nokia and Samsung, Ericsson added a new assembly line for the production of its multi-standard Radio Base Station (RBS) 6000 modules at its manufacturing unit in Kukas, Jaipur. It was established in 1994 with manufacturing of and then took up to manufacturing 2G and 3G equipment. This Ericsson’s supply unit manages production lines providing equipment for radio access network, core network, transmission solutions and modules.





Not only these but Chinese leading Telecom leaders like Huawei and ZTE are also investing in India’s telecom manufacturing. Recently, ZTE has announced its investment in smart grid solutions market in India.





The telecom industry is a vital contributor to India’s GDP. It will become much more essential as the investment for growth of telecom manufacturing will play a significant role in reducing the import duties. In addition, the Indian government will ask companies to procure more domestic made products. Higher the investment in manufacturing higher will be number of employment opportunities. India will also be able to export to its neighbouring countries.





Moreover, India is one of the fastest-growing mobile markets, witnessing high subscriber growth year-on-year. The mobile subscriber base is expected to reach 1,440 million subscribers by 2017 from around 850 million at present.





Thanks to quality, foreign telecom equipments are preferred by domestic telecom operators. If India will have potential telecom equipments manufacturing then it will automatically help to balance the ecosystem.





Further, Indian government is also trying to enhance the telecom manufacturing.  They have announced that if a service provider is unable to meet the criteria of market access, then the shortfall value of the equipment will be deposited to Telecom Research Fund or the Telecom Equipment Manufacturing Fund by the company.





India will see investment see more investments in 3G and 4G in coming years. At least, the investment in telecom manufacturing will lower down the cost of handsets. Mobile phone users might hesitate less before shifting to 4G enabled handsets. The outcome of this will be quicker 4G roll out.





By Rashi Varshney
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