India’s home-grown telecom equipment vendors are looking to form global consortiums with international partners to play an active role in building competitive products for the local market currently dominated by multinational vendors like Nokia, Ericsson, Ciena, Cisco and Huawei among others.
According to media reports, vendors like Sterlite Technologies, Tejas Networks, and other local vendors are looking to leverage India’s recent move to allow greater market access to companies who do 50% value-addition or source 50% components locally.
Sterlite Technologies chief executive officer, Anand Agarwal, said that partnerships between India’s home-grown companies and international companies could potentially enable India to deliver digital networks, indigenous solutions for 5G, and device manufacturing for the world as part of the global supply chain.
Sanjay Nayak, chief executive of Tejas Networks, said that a consortium approach is needed to bring complementary skill-sets and product strengths to create an end-to-end solution. “…such consortiums can also be led by large Indian IT services companies with global experience in building telecom networks,” he was quoted as saying.
Nayak also urged the Indian government to enable licensing of “background intellectual property rights (IPR) from global players on a fair and reasonable basis to Indian companies for technologies like 5G.”
Both companies suggested that India should also focus on collaborating with semiconductor foundries in Taiwan and Korea to manufacture semiconductor chips with Indian IPR and design.
India’s Prime Minister Narendra Modi recently revealed his vision, dubbed as ‘Aatmanirbhar Bharat or self-reliant India, to bring global supply chains to India, especially for electronics and telecom products.
Earlier this month, the Indian government changed norms to give maximum preference to companies whose goods and services have 50% or more local content. The move aims to provide a renewed push to the ‘Make in India’ project and to make the country self-reliant under the new vision.
As per the changed norms, companies with less than 20% of domestic content in their goods or services will not be able to participate in most of the government tenders.
India, which is yet to finalise a production-linked incentive (PLI) for telecom equipment manufacturing, recently asked multinational telecom equipment makers Nokia, Ericsson, Huawei, and Samsung to deepen their manufacturing capabilities and to prepare for 100% local sourcing of components required for telecom products.
India also wants these players to make the country an export hub for 5G equipment by leveraging schemes like a production-linked incentive (PLI).
During a recent meeting with the telecom department (DoT), home-brown telecom vendors like Tejas Networks, Sterlite Tech, and Vihaan Network asked the DoT to fix the local value addition clause under eligibility criteria for the PLI scheme to avoid almost 100% import of components.
Multinational vendors, however, urged the telecom department to not to fix any local value addition thresholds in the absence of a robust local components ecosystem.
These vendors have also been blaming government officials for circumventing the existing domestic manufacturing policy directions to favour multinational telecom equipment vendors.
Home-grown vendors had recently alleged that they were not consulted before the floating of state-run BSNL’s phase nine 4G expansion tender.
They said that terms of this tender excluded them from bidding, and favours Chinese vendors like ZTE, besides flouting the Indian government’s ‘Make in India’ norms under the Public Procurement (Preference to Make in India) Order 2017.
BSNL is likely to revise the terms of this tender but hasn’t provided any confirmation.