Operators promoting foreign cos: domestic vendors

Homegrown telecom equipment manufacturers today charged mobile operators with promoting foreign vendors and asked the Telecom Regulatory Authority of India (Trai) to create level playing field for both to co-exist.

"There should be preference given to products that are made in India but there are foreign lobbies that have been acting to discourage sourcing of Indian products," alleged Rajeev Mehrotra, president, Telecom Equipment Manufacturers Association (TEMA), at an open house conducted by Trai.

He emphasised that some of the key associations have gone on record saying that they don't want to source products from Indian manufacturers.

"In India, it is CEOs of some leading telecom companies, who did lobby for foreign equipment vendors when the government had recently imposed checks on some equipments due to security reasons," Mehrotra said.

The Cellular Operator Association of India (COAI) Director General Rajan Mathews dismissed these charges and mentioned that service providers have outsourced most of the network to vendors, who deploy end-to-end solution.

"Telecom service provider just provide services. We have to take care of the fact that a telecom service provider has to provide service to consumers at affordable rates. Hences we have to choose a vendor that rolls out our network at a competitive price otherwise we will lose national agenda of affordability," said Mathews.

Mathews added that COAI is yet to understand the way service providers can play an active role in promoting domestic manufacturing.

Contesting this claim made by Mathews, Telecom User Group President Anil Prakash said that service providers have tried to do away with the responsibility by giving the excuse of outsourcing their network roll out to third party.

"Service providers can play an important role by pushing their vendor to give preference to products that are already being made in India," said Prakash.

An Ericsson representative mentioned that the government should not push for reservation of any particular product category to be deployed in telecom network but products developed in India should be able to compete at global level.

"There is need to identify what is Indian? Ericsson itself has developed many products in India and will continue to innovate," said the Ericsson representative.

He added that the push should be to develop quality products from India, which should be in a position to compete with products developed in any part of the world.

On this, Centre for Development of Telematics (C-DOT) Director Vipin Tyagi claimed that C-DOT has recently developed next generation products but still it had been overlooked by telecom service providers.

Tyagi added that a telecom product can be developed in India, which can be at par with any other product developed in any competing nation but still there remains a difference of about 23% between price of the product developed in India and abroad.

"Indian product remains expensive because of various kind of duties that an Indian manufacturer has to pay and also the input cost for making the product in India is higher as compared to the competing nations," said Tyagi.

Mehrotra added that equipments manufactured in India can be made at competitive price if the government plays an active role by reducing various duties that are imposed on local production and their sourcing.

"Any Original Equipment Manufacturer (OEM) can import components at zero per cent duty from China but for sourcing any component from indigenous market, an OEM needs to pay multi-level duty. This puts indigenous manufacturing of components at a disadvantageuos position, which the government should look at," he said.

Besides reduction of duties on indigenously produced equipments, stakeholders present during the session unanimously supported the creation of Indian IPR and a fund to support research and development activity in the country.