The prime minister’s Atmanirbhar Bharat Abhiyaan initiative has given a call to industry to build self-reliance and ensure that more value addition takes place within the country. In the telecom sector, this initiative will foster a positive environment for local production of 4G and 5G components for telecom networks and reduce the dependence on technology imports. Another trigger for the move towards domestic production is the scepticism around potential security threats emanating from imported telecom equipment, particularly from China.

The government’s focus on self-reliance will, in particular, give a big boost to home-grown players such as ITI Limited, Tejas Networks, STL and HFCL, which have expanded their collaborations and technology expertise in the sector over the years. It will also facilitate local value addition by global network vendors. These companies, which have worked with telcos across various developed countries, have assisted Indian telecom operators to transition across technology standards and played a key role in their 4G journey as well. While most of these companies have set up some manufacturing facilities in India in recent years, the local value addition in the Indian telecom technology and network equipment sector continues to be low. As India steps into the 5G era, and seeks to develop an indigenous ecosystem of technology use cases, it is time now to push for local manufacturing of high-value telecom equipment to support 5G.

A look at the key factors that will be instrumental in India’s efforts to achieve self-reliance in the telecom space…

Policy positive

In the past, proactive government policies have proved to be a game changer for the domestic handset manufacturing industry. As per the India Cellular and Electronics Association (ICEA), under the government’s Make in India programme, imports of completely built-up handset units have declined sharply, from 78 per cent of domestic demand in 2014-15 to a mere 3 per cent today. The recently released production-linked incentive (PLI) scheme for mobile manufacturing has also elicited significant interest from local and global vendors to expand their manufacturing set-ups in the country.

The government is now planning to launch a similar scheme to boost domestic telecom equipment production. The scheme, worth Rs 150 billion, is expected to be rolled out by September 2020 and will incentivise telecom equipment manufacturers to set up production bases in the country for the local and global markets. It will offer financial incentives to 5G equipment makers, and companies such as Nokia and Ericsson can leverage it for setting up/expanding their 5G production capacity in India.

Ericsson and Nokia both already make 4G and 5G telecom equipment in India. Ericsson states that the telecom equipment that it supplies to Indian telcos is made in India itself, at its Pune facility. It also exports 5G radios from this facility to other markets. The Swedish equipment manufacturer was selected by Vodafone Idea in 2019 to deploy 5G-ready equipment across select markets in India.

Meanwhile, Nokia has recently signed a multi-year deal with Bharti Airtel, valued at around $1 billion, to assist the telco in aggressively expanding its 4G network and laying the foundation for high speed 5G technology. As per the contract, Nokia will supply around 300,000 radio units to Bharti Airtel by 2022. The company has its manufacturing unit in Chennai, which, it says, was the first to manufacture 5G radio equipment in India in 2018. The factory caters to both the domestic and the international market and ships products to over a hundred countries.

Focus on R&D and innovation

For any country to be self-reliant, it needs to develop its technological capability and competitiveness. India does have the intellectual capital; its R&D centres located in Bengaluru, Hyderabad and Noida are full of Indian engineers and designers writing telecom software, designing chips and developing networking solutions for global tech firms. But there is a lack of policy direction.

The Telecom Regulatory Authority of India’s (TRAI) recommendations on domestic manufacturing two years back refer to the establishment of an R&D fund. But there has been no policy decision on these recommendations till date. The Department of Telecommunications (DoT), too, had come out with a report on promoting R&D in 2013. The report is still relevant but has not been implemented so far, like several other policy directives mentioned under the National Telecom Policy 2012, or its successor, the National Digital Communications Policy, 2018.

According to Rakesh Kumar Bhatnagar, retired adviser (technology), DoT, “There are no positives to report for the past two years as regards the R&D parameters mentioned under the NDCP, 2018. The policy as such is fully supportive of Atmanirbhar Bharat, provided it is implemented in letter and spirit by all involved in decision-making.”

Adds Rajan Mathews, former director general of the Cellular Operators Association of India (COAI), “We do not invest heavily in R&D and hence, we have been left behind in the intellectual property rights (IPR) game. While R&D has to be incentivised, there is also a need to consider open source as a serious business opportunity.” In fact, limited investments in R&D and innovation have resulted in an excessive dependence on imports by the country.

While there are several companies that have come out with high quality make in India telecom products, they are not able to scale up. “As of today, we have only the Centre for Development of Telematics (C-DOT), a government R&D centre, to lead our march on the telecom technology front,” says Bhatnagar.

C-DOT’s digital rural exchange, developed during the 1980s-1990s, was a great success. Designed for developing countries, it displaced the products of many multinational firms in India. The technology was transferred to multiple private companies. Over the years, C-DOT has developed significant capability in mobile, wireless, networking and satcom, and has several patents to its credit. However, in recent years, its products/solutions have not been given preference by private telcos. That said, GPON developed by C-DOT is the fundamental technology being used in the government’s BharatNet project.

“What we need is many more C-DOTs in the country. C-DOT’s fixed line solutions have laid the foundation of Indian rural networks and there is no reason why it cannot develop 4G and 5G networks,” says Bhatnagar.

Collaboration call

To fast-track 5G-related manufacturing, domestic companies can look to form consortiums amongst themselves as well as with global majors to leverage expertise and scale. To this end, ITI has been in discussions with various leading technology companies and start-ups to build a make-in-India framework for 4G technology, upgradeable to 5G. The PSU plans to manufacture the 4G and 5G eNodeB, an LTE radio access network element, and develop other related network capabilities. The company’s past experience of making base transceiver station (BTS) equipment for Bharat Sanchar Nigam Limited’s (BSNL) GSM expansion programme will come in handy. Recently, in June 2020, ITI and Tech Mahindra entered into an agreement to work together in the areas of 4G and 5G networks as well as smart city programmes as a part of the government’s Atmanirbhar Bharat initiative.

Meanwhile, VVDN Technologies, an India-based telecom contract manufacturer, has signed a 5G manufacturing deal with STL to make 5G radio products, including small cells and macro RU. VVDN is expanding its local manufacturing of 5G equipment for local and global telecom operators. The company will start a PCB plant with an investment of Rs 600 million-Rs 700 million. Besides assembling the PCB, the company will be able to fabricate the bare PCB in India.

As per industry analysts, even a company like Reliance Jio will have to collaborate with vendors on the equipment side if it wants to deliver on its claim of developing a 5G network entirely indigenously and in-house. The announcement has been received with some scepticism. Jio’s entire 4G network has reportedly been built by South Korea-based Samsung. Unless it has already acquired some small players for their intellectual property, there is strong speculation that Jio may collaborate with global vendors that have strong patent positions in the 5G market. It may extend its partnership with Samsung, but with a more make-in-India flavour to it or collaborate with Qualcomm, which has recently picked up stake in its Jio Platforms.

Enabling ease of business

India’s move towards self-reliance also coincides with several global companies looking at alternatives to China for establishing manufacturing facilities. In this situation, India could well replace China as a leading low-cost, high technology telecom and technology equipment supplier.

To achieve this, the government would need to extend support to the sector in the form of infrastructure and incentives. “You cannot just unplug factories in other countries and bring them to India. The commercials must make sense,” points out Rahul Agarwal, managing director, Lenovo India. To this end, a PLI scheme dedicated to the telecom equipment segment would go a long way in enhancing telecom manufacturing and R&D activities in India.


The government’s to push self-reliance in telecom is crucial for establishing an indigenised 5G ecosystem in the country. The government must, on the one hand, ensure ease of doing business for global vendors wanting to set up a manufacturing base in India and on the other, provide a policy impetus to domestic players through preferential market access. The latter will also foster the development of deep competencies and technical capabilities, which are paramount for India’s journey to self-reliance. Over time, with the right policy enablement, the industry could even look at becoming an export hub for technology.

By Akanksha Mahajan Marwah