Telecom industry looks promising: Manufacturers need to grab the opportunity

- Advertisement -
- Advertisement -

The telecom hardware manufacturing sector is presently dominated by international majors like Nokia, Ericsson, LG, Motorola, Samsung, Alcatel-Lucent, Huwaei and ZTE, who have set up manufacturing bases in India (all, except ZTE). Domestic manufacturers have made little contribution to this industry. Local operators and telecom equipment makers are yet to take up innovation as their main focus—lack of R&D budgets is being cited as the major bottleneck. Hence, whatever innovations and developments that have occurred in the telecom industry in India are thanks to the global players. However, the contribution of the domestic manufacturers, though just a few in number right now, cannot be ignored. The state run Indian Telephone Industries Ltd (ITI), Himachal Furturistic Communications Ltd (HFCL), Shyam Telecom Ltd, etc, are emerging as leading manufacturers.
Despite being the second largest telecom market in the world, telecom equipment manufacturing in India is still to take off. Last fiscal year, the telecom equipment market in India grew by 18.6 per cent, with an overall revenue of Rs 1,368.33 billion. Among the various telecom equipment sub-categories, the enterprise equipment segment grew by 31 per cent to touch Rs 200 billion. The switches and routers segments showed 92 per cent and 65 per cent growth, respectively. According to industry experts, this industry will continue to register robust growth after the roll out of 3G and broadband wireless services.
Business potential
Business potential in this industry is, therefore, enormous. More so, as the telecom sector straddles multiple segments—from electronics manufacturing services (EMS) and component manufacturing to indigenous product design and development.New entrants to the domain as well as the existing players need to realise this and make the most of the current business environment. Indigenous product design and development: This segment offers enormous potential, where India can take a lead. It seems promising for both existing and new players. Earlier, the standards in the global telecom industry used to differ as different countries developed unique standards that would help their domestic companies grow. Now, since the standards have become uniform across the globe, one can develop a product in any part of the country and sell it across the world. Of course, localisation and customisation plays a big role here. By offering customised products, one can compete with other products available in the market.
Wireless infrastructure: Talking of product specific opportunities, infrastructure for wireless networks is growing rapidly and holds great potential. Service providers today require innovative, converged infrastructures that are scalable to cater to tomorrow’s new bandwidth intensive services. Such networks need to be intelligent, and support integration and flexibility. The two major trends in infrastructure are the demand for more bandwidth and more data. Data services such as broadband, mobile video and mobile gaming will require network infrastructure to have superior data capabilities. Hence, by upgrading the infrastructure to equipment that are capable of supporting these new services, wireless operators have great scope for growth.
Backhaul: The backhaul portion of the network comprises the intermediate links between the core network, or backbone, of the network and the small sub-networks at the edge of the entire hierarchical network. This segment offers great opportunities as 60-70 per cent of India’s voice and data backhaul from the base station to switching stations are being transmitted through the microwave radio or high speed radio working on the microwave range.
Optical transmission: Optical transmission is a key technology for increasing communication capacity. In optical fibre networks, the number of wavelength channels and the bit rate per wavelength channel, that is, the time division multiplexing (TDM) bit rate, determine the transmission capacity. Transmission networks require switches, routers, modems and sets, all of which witness rapid developments. Backing optical transport is the gigabit Ethernet passive optical network (GE PON), which provides broadband through optical fibres, offers big opportunities for product design and development, and meets the unique needs of the Indian consumers.
Energy efficient products: As the manufacturing fraternity is paying more attention to energy efficient products, this is another promising domain. The operators are looking out for products that consume less energy. Such energy efficient products offer solutions that can help them reduce energy costs and manage energy as per requirements. Thus, indigenous players have immense opportunity to cater to the needs of solution providers and network operators.
Scope for EMS companies
Among the ancillary industries, EMS is yet another area that can grow and offers huge potential. India can produce many Celesticas and Flextronics. The industry offers potential revenue of US$ 15-16 billion, by converting designs into products and distributing them across India. There is a great opportunity for EMS companies that specialise in complex PCB assembly and testing, systems assembly, systems integration, manufacturing high end and complex telecommunication equipment, etc. This segment alone could develop into a growing industrial sector provided the right policies are in place to support it. The demand for setting up a supply chain is also huge. As a result, the local components industry can experience a big boost along with the EMS industry. Through the pull effect, the telecom sector can help the components and devices industry flourish.
Achieving results
With enormous opportunities available, it is not a difficult task for India to take the lead in the telecom sector. The two things that work in its favour are the local demand and the large technical and managerial workforce. Also, not many countries have the intellectual capital in terms of engineering and management skills that India has. Of course, software, which has become the key in the telecom equipment and network business, is a unique strength of India. All these are positive aspects that are waiting to launch the industry onto the fast growth track.
Challenges faced
Despite immense opportunities and a favourable economic scenario, the telecom manufacturing industry is still lagging behind. One of the major drawbacks faced by this industry is that there is no proactive support offered by the government. Different bodies and associations have brought up this issue, raising awareness about the need to leverage the market. However, nothing substantial has come up. There have been ample analyses and discussions, and proposals have been made, but concrete results are yet to be seen.
Other than proactive policy support, this industry suffers from infrastructure and logistic handicaps. Also, the component ecosystem to support the industry is not competent enough and that’s where countries like China, Germany and France take the lead. The telecom industry offers unique opportunities for creating a vibrant domestic manufacturing industry, and for encouraging the growth of other segments like design, EMS and the component industry. India must encourage local manufacture and try to emerge as a leader in this industry.

- Advertisement -

Related Artcles

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!

Exclusive

“Our Goal is to Offer 1000 To 1500 Varieties, With Volumes Ranging From 10000...

0
During a chat with Nitisha Dubey from EFY, Mohammed Iqbal, CEO of Technomake Electronics Pvt Ltd, talks about PCB assembly and major customer focus...

India, China Grow Amid First Global Cellular IoT Module Shipments Annual Decline

0
Several companies started local manufacturing in India. 4G Cat 1 bis emerged as the fastest-growing segment. Around 12% of the modules shipped in...

“More Chargers Provide Security And Confidence To Customers, Encouraging EV Adoption”

0
With an agenda to transform the EV industry, EarthtronEV has established 250+ charging stations on major highways across India. The company aims to interconnect...

Buzz

TSMC

SmartSoC To Provide Chip Design Services Through TSMC’s Design Alliance

0
SmartSoC solutions will provide chip design services and system-level solutions, making it easier for customers to adopt TSMC's technology. Chip design services provider SmartSoC Solutions...

Montra Electric Boosts Amritsar’s Green Mobility with RAAHI Project

0
The initiative is a component of the City Investments to Innovate, Integrate, and Sustain (CITIIS) program, which falls under the auspices of the Ministry...

BYD Delays Vietnam EV Factory Plans

0
Vietnam's government announced in May that BYD plans to construct a facility for manufacturing and assembling electric cars in Phu Tho, a northern Vietnamese...

Important Sectors

Microchip Technology Expands TrustFLEX Family With CEC1736 Real-Time Platform Root Of Trust Devices

0
TrustFLEX devices along with the Trust Platform Design Suite tool will simplify the enablement of root of trust from concept to production in wide...
TSMC

SmartSoC To Provide Chip Design Services Through TSMC’s Design Alliance

0
SmartSoC solutions will provide chip design services and system-level solutions, making it easier for customers to adopt TSMC's technology. Chip design services provider SmartSoC Solutions...

India, China Grow Amid First Global Cellular IoT Module Shipments Annual Decline

0
Several companies started local manufacturing in India. 4G Cat 1 bis emerged as the fastest-growing segment. Around 12% of the modules shipped in...

Montra Electric Boosts Amritsar’s Green Mobility with RAAHI Project

0
The initiative is a component of the City Investments to Innovate, Integrate, and Sustain (CITIIS) program, which falls under the auspices of the Ministry...

BYD Delays Vietnam EV Factory Plans

0
Vietnam's government announced in May that BYD plans to construct a facility for manufacturing and assembling electric cars in Phu Tho, a northern Vietnamese...

Manufacturing

BYD Delays Vietnam EV Factory Plans

0
Vietnam's government announced in May that BYD plans to construct a facility for manufacturing and assembling electric cars in Phu Tho, a northern Vietnamese...

JLR To Hire 250 Electrical Technicians For Future EVs

0
These new roles, part of a £15 billion investment, are in addition to 300 positions created last year by the British car maker. Jaguar Land...

Altmin India Partners With WMG To Advance Battery Tech

0
Altmin and WMG will collaborate to strengthen their global battery materials supply chain position by optimizing cathode materials and developing diverse cell designs across...

EVs To Cost Less Than Gas Vehicles by 2027, Says Gartner

0
Gartner predicts a faster decline in production costs compared to battery costs, which represent the most significant expense in an electric vehicle, accounting for...
MG

MG Motor To Set Up Battery Assembly Unit At Halol Facility

0
The company plans to investigate battery cell production in collaboration with external partners. Automaker MG Motor India is actively exploring the possibility of assembling and...