Not an Idle Dream!

In order to make Indian telecom a success, we need to identify the key areas for innovation and a reservoir of talent to spearhead the movement

The telecom industry, along with aeronautics and space sectors, deploys some of the most-advanced technologies in the world. Hitherto in India, the emphasis has always been on the growth of telecom service sector, ie, the teledensity and we have outnumbered all estimates & projections by the government and the industry. Overall, it’s good to see a certain amount of momentum behind the cause of telecom manufacturing. Under these circumstances, it becomes important to set a direction to this cause, so that the momentum gathered is not wasted and the movement is not written off as an idle dream.

In order to make the dream a success, we first need to identify what will not work or has not worked. At present, telecom equipment being pumped into the Indian telecom network is largely imported. Once we have the equipment, the installation is by and large a routine job carried out by the local outfits of multinational vendors or associates/contractors. There is hardly any gain of knowledge by this process. Last but not the least, all operators have now opted for a Managed Services model, albeit outsourced to the subsidiary companies of equipment suppliers. As a result, we are not gaining anything on the technological front or developing any meaningful expertise or manufacturing base.

An incremental approach that focuses on pushing the envelope beyond the existing competencies is bound to fail, as it will not change the fundamental balance of power between the current equipment vendors and our industry.

Market Signals: Uncertain Outcomes

Relying on market signals alone is also fraught with uncertain outcomes. Raising tariffs on imported equipment can be part of an overall strategy, but cannot be the main thrust. While economists prefer market based interventions, the tariff rates that will turn the tables in favor of domestic manufacturing may not be amenable to an accurate estimation.

It’s important to have a long-term technology vision and plan to align domestic R&D and manufacturing. However this cannot be at the expense of mainstreaming domestic manufacturing immediately with the systems currently in use.

Areas of Concentration

Overall, the main thrust of the approach must involve looking at the intersection between the current market demand and domestic