The Korea-based tech giant might be expecting to source telecom gear to India-based Reliance Jio and other telecoms in the world
South Korean tech giant Samsung might be applying for the Production Linked Scheme (PLI) scheme based around telecom gear. A news article by the Economic Times mentions that the company might be looking towards supplying 4G and 5G gear to its only Indian telco customer Reliance Jio. The company may also supply 4G, 5G gear, along with other telecom equipment, to telcos based out of the country.
The PLI scheme was announced recently by the government of India, and an amount of Rs 12,195-crore has been earmarked for the same. The news of Samsung’s probability of applying for the scheme has broken out at a time when Airtel has been said to give a procurement order to China’s Huawei worth Rs 300 crore.
Samsung, if it applies for the scheme and gets approved, would have to invest a minimum of Rs 100 crore and set up lines to manufacture the above mentioned gears. It iw worth mentioning here that Mukesh Ambani led Reliance Jio has shown intentions of building or sourcing everything related to 5G from India only. However, the contract of Relaince Jio with Samsung has already come to an end.
The South Korean company is already a part of the PLI scheme around PLI schemes announced last year. In fact, it is the only Korea based company to have made it to the approved list of mobile manufacturing companies taking part in the same.
It is also rumored that the likes of Jabil, Foxconn, Nokia, Ericsson, Cisco and Flex will also be applying for the PLI scheme around telecom gear. Samsung has already worked with the likes of Telus and Videotron (Canada), US Cellular (United States) and Spark (New Zealand), and helped these telcos setup 5G services in their respective countries.
The company, in 2020, had announced that it had signed a deal worth $6.64 billion network order with US’ Verizon. Not to mention that Samsung is the leader in 5G network space, when it comes to its home country South Korea.
The PLI scheme for telecom gear, announced by the government of India, aims to reduce India’s dependence on sourcing telecom gear sourced from outside the country. The authorities expect the scheme to lead to incremental production of around Rs 2.4 lakh crore, with exports of around Rs 1.95 lakh crore, over the period of next five years, from the starting date (not announced yet).
Telecom gear included in the scheme includes core and transmission equipment, 4G/5G next generation radio access network and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) access devices, other wireless equipment and enterprise equipment like switches, routers etc. The final guidelines, explaining, how global and India-based companies can apply for this scheme, have not been released yet by the government of India.
Revenue from the telecom equipment sector, as per India Brand Equity Foundation (IBEF), is expected to grow to US$ 26.38 billion by 2020. The number of internet subscribers in the country is expected to double by 2021 to 829 million and overall IP traffic is expected to grow four-fold at a CAGR of 30 per cent by 2021.