The Telecom Regulatory Authority of India (TRAI) on Tuesday issued a consultation paper seeking views of various stakeholders for promoting manufacturing and research and development (R&D) of telecom equipment.

The consultation paper aims at discussing, debating and finalising measures for promotion of R&D and creation of intellectual property as well as manufacture of telecom equipment and electronic components in India, TRAI said in a statement.

The last date for submitting written comments and counter-comments is January 14 and January 21, 2011, respectively. Notably, TRAI had issued a pre-consultation paper on the same subject in May this year for obtaining the views of the industry.

Pointing out that the telecommunication sector was a major contributor towards the national economy, TRAI said the growth in the sector had attracted a large demand for telecom equipment and subscriber terminals. According to reports, the telecom equipment market is over Rs.1-lakh crore.

“Growth in the number of subscribers has been considerable and is expected to reach 100-crore by 2014. This growth in turn attracts a large demand for telecom equipment and subscriber terminals…However, the domestic telecom equipment manufacturing segment has not been able to keep pace forcing the telecom operators to import most of the equipment required for their networks,” it said.

Even the existing domestic manufacturing of telecom equipment in India utilises technology developed abroad resulting in the benefits of sales of such products accruing largely to foreign companies. To meet the country's demand as well as to be able to export, India has to create a synergetic telecom ecosystem and build globally competitive product companies across the telecom value chain, TRAI added. According to a recent report by technology researcher Gartner Inc., India ranks fourth in telecom equipment manufacturing in the Asia-Pacific (APAC) region. The country had a 5.7 per cent share of the region's total telecom equipment production revenue of $180 billion in 2009. India is expected to move to the third spot (after China and South Korea) with a share of 8.5 per cent of the total (estimated) APAC telecom equipment production revenue of $277 billion by 2014.

The Department of Telecom data shows that production of telecom equipment at the end of March 2009 stood at Rs.51,800 crore with a compounded annual growth rate (CAGR) of 29 per cent in the previous five years. As compared to this, Chinese telecom equipment maker Huawei Technologies Co. alone reported revenue of Rs.82,350 crore in 2008, up from Rs.57,600 crore in the previous year.

The Union Ministry of Commerce & Industry and Ministry of Communications & IT, have set up Telecom Equipment and Services Export Promotion Council as a first step in promoting exports from India, both for “Indian products” and for “Indian manufactured products”.

According to the council, production amounted to Rs.51,000 crore and exports Rs.13,500 crore in 2009-10.

Full text of the consultation paper is available at www.trai.

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