India, being at the fourth rank in telecom equipment manufacturer in asia pacific region contribute’s only 8.5% share of regional telecom equipment production revenue just because 90% of telecom gear in India’s market are being imported.
India constitute 6.6% of global demand for telecommunication equipments in 2014-2015 and industry is expected to spend upto INR 46,000 cr to buy gears excluding handsets and bulk of this money is going to be spent on import from Europe and china because demand for the telecom equipments has increased trillions of rupees but there is no such a strong manufacturing base in India. Hardly any value addition is done in India as here just assembling, packaging and selling is done.
Due to inadequate R&D facilities in country equipments manufactured domestically could’nt match the pace of technology. The Indian firms that design & manufacture and have intellectual properties shares only 3% of the huge INR 50,000 crore telecommunication equipment market whereas the foreign companies raised this share to 10%to12%. Department of telecom data shows that production of telecom equipment in india at end of march 2009 was INR 51,800 crore with CAGR of 29% in last 5 years. As compare to this the chinese telecom equipment maker Huawei Technology Co. ltd. alone reported revenue of INR 82,350 crore in 2008 up from INR 57,600 crore in 2007.This is because the design and intectual property that constitute large part of value addition is in abroad and only packaging, integration is done in India.
Considering last few years the ratio of increase in import and export is upto 3:1 which is not a good thing as India is paying a lot more than the actual value of the equipment and this loss could be resist by inrease in domestic production of telecom equipments.
As with the introduction of 3G and the upcoming 4G technology the data consumption multiplies manifolds and the growth in no. Of connections upto 1 billion the gross revenue could be INR 1,57,984.76 crore and No. of jobs upto 20 million.
If product development and component sourcing is done within India only then much more value is added then just assembling, packaging, selling and hence giving maximum advantage to the country. Manufacturing locally could have many advantages such as it could contribute in providing the inclusive growth of India which it is looking for. Locating plant in rural area would help in providing employment & income generation opportunities thereby providing livelihood.Rural people could access better education facility and improve country literacy rate and implausibility.
So to become force in the global telecom space India has to create an ecosystem & build globally competition products companies across telecom value chain from components , devices to infrastructure.