India Pushes Private Telcos to Adopt Local Gear Amid Rising Geopolitical Uncertainties

India is pushing private telecom operators to use more local equipment amid rising geopolitical uncertainties, which could impact foreign gear makers like Cisco, Nokia, Ericsson, and Samsung. Local manufacturers like Tejas Networks, HFCL, Sterlite, and VVDN may benefit. Telcos have agreed to the plan, but with conditions like competitive prices and quality. The government aims for self-reliance and more local manufacturing.

India is encouraging private telecom operators to increase their use of locally-made equipment due to rising geopolitical uncertainties. This move could negatively impact foreign telecom gear makers like Cisco, Nokia, Ericsson, and Samsung, while benefiting local manufacturers such as Tejas Networks, HFCL, Sterlite, and VVDN.

New Delhi: The Department of Telecommunications (DoT) has asked private telcos to voluntarily augment the share of locally-made equipment in their networks. If the telcos fail to comply, a mandate will be issued, forcing them to adhere in a time-bound manner. The DoT has requested companies to submit a roadmap for the use of indigenous equipment, but Bharti Airtel, Reliance Jio, and Vodafone Idea did not respond to email queries [1].

The government's aim is to achieve self-reliance and boost local manufacturing, especially in light of the recent doubling of US tariffs to 50%. The DoT is considering this move for new orders and not seeking the replacement of existing telecom equipment, which could otherwise swell costs for financially-stretched telcos.

However, there are quality concerns. The DoT's standing committee had previously rejected recommendations from the Telecom Regulatory Authority of India (Trai) on the use of indigenous products by private telcos. The regulator had proposed a licence fee rebate for using local gear, which is now being re-examined. Industry experts note that while telcos may agree to buy from local firms, the current supply may not meet the required quantity and quality. BSNL, a state-run telco, has faced challenges with quality and quantity due to similar mandates [1].

Currently, private telcos are using limited local technology and equipment. Vodafone Idea, for instance, has been buying certain quantities from Sterlite Technologies, HFCL, and Tejas, while Reliance Jio has been utilizing in-house equipment. Bharti Airtel also agreed to buy from homegrown firms, but supply constraints have been an issue. An industry executive noted that telcos are willing to support local firms as long as their business and commercial needs are met [1].

India's move to support local companies in the critical sector of telecom is not new. China, for instance, mandates its operators to buy only from local companies. Over the past few years, India has made it clear that it wants to become self-sufficient in telecom gear manufacturing. BSNL has already been mandated to use equipment only from local firms, and the 4G network was rolled out by a consortium comprising C-DoT, Tata Consultancy Services, and Tejas. The same strategy will be followed for the 5G network with only local firms supplying [1].

References:
[1] https://m.economictimes.com/industry/telecom/telecom-news/india-pushes-private-telcos-to-adopt-local-gear-amid-rising-geopolitical-uncertainties/articleshow/123244250.cms