TRAI consultation paper on local telecom equipment manufacturing

telecom equipments India import and exportTelecom Regulatory Authority of India (TRAI) has floated a consultation paper on promoting local telecom equipment manufacturing on 18 September, 2017.

TRAI said telecom industry stakeholders can submit their comments by 16 October 2017 and counter comments by 30 October 2017 by sending e-mail to Arvind Kumar, advisor (BB&PA) at TRAI to arvind@trai.gov.in and bharatgupta.trai@gmail.com.

India with 1,210 million subscribers on 31 July 2017 is the second largest telecom market in the world while continuing to grow at a Compounded Annual Growth Rate (CAGR) of 19.6 percent during FY 2007-17.

# Over 400 million internet users
# Contributes 6.5% to India’s GDP
# Rural tele density increased by 30% over the last five years
# Telecom industry generates over 4 million direct and indirect jobs
# 38 new mobile manufacturing units set up since September 2015
# FDI increased from $8.637 billion in 2015-16 to $37.435 billion in 2016-17

TRAI’s latest consultation paper with a view to promote local manufacturing of telecom gears is expected to boost initiatives such as Digital India, Smart Cities, 4G investment, 5G deployment, Machine to Machine (M2M), Internet of Things (IoT), among others.

The below chart shows telecom related patents filed from India.
India telecom equipment patents
The graph prepared by TRAI depicts the Import-Export of telecom equipments in India from 2012 to 2016. Import bill for telecom equipments has increased at a rate of 16.3 percent annually while the exports have declined at an annual rate of 17.98 percent.

Unlike software companies, India does not have any significant presence in the telecom equipment market. Indian telecom operators such as Bharti Airtel, Reliance Jio, Idea Cellular, Vodafone, BSNL, among others, rely on Ericsson, Huawei, ZTE, Nokia, Samsung, Cisco, IBM, HPE, Oracle, Juniper Networks, etc. for their telecom networks.

Issues for discussions

Indian initiatives have succeeded in attracting significant investments in other sectors like LED, consumer electronics, mobile handsets, automotive electronics etc. But they have failed to attract investments in telecom equipment sector. What are the reasons for the poor performance of local telecom manufacturing industry?

What policy measures are required to boost innovation and productivity of telecom manufacturing in the country?

Does India need new patent laws to address the issues of local manufacturers?

Is the existing mechanism of Standardisation, Certification and Testing of Telecom Equipments adequate to support the local telecom manufacturing?

Telecom industry stakeholders can suggest a dispute resolution mechanism for determination of royalty distribution on FRAND (Fair Reasonable and Non Discriminatory) basis.

Are the current fiscal incentives sufficient to promote the local telecom manufacturing?

ITA related issues to be addressed for making the local Telecom Manufacturing more competitive and robust

Should an export oriented/promotion approach be adopted in the telecom equipment manufacturing sector?

Suggest steps to create environment to attract foreign investment players for setting up establishments which in turn can result in technology dissemination, innovation, generation of jobs, skilled labour force, etc.?

Does the existing PMA policy require any change to encourage local telecom manufacturing in India.