Date: 15/05/2009

Severe dearth of quality Indian telecom equipment companies

Alcatel-Lucent and Huawei have recently won purchase orders from Unitech Wireless for it's new GSM/EDGE mobile service offering. If you look at such recent telecom equipment orders placed by Indian telecom service providers, it's mostly awarded to Alcatel-Lucent, Ericsson, Nokia-Siemens, Motorola, Huawei and ZTE.

India is now a 3rd biggest telecom market in the world after U.S. and China. But it's pathetic to see this big and growing communication and networking equipment market is buying equipments from U.S. Europe and Chinese telecom equipment companies. There is not even one Indian company, which can provide telecom gear equivalent to the above companies.
The major role of at-least one Indian telecom equipment vendor is important due to the security related issues involved in Telecom infrastructure.

Chinese Telecom supplier such as Huawei and ZTE are least recommended for supplying telecom equipment to Indian telecom industry for security reasons. There are media reports on, IB and defense ministry warning Bharth Sanchar Nigam Limited (BSNL) to not award any orders to Huawei and ZTE.

It was not true that India is always backward in telecom technology. Few decades back Govt. owned Indian companies such as Indian Telephone Industries (ITI), Centre for Development of Telematics (C-DOT) were able to design and make world-class switches. With the proliferation of mobile phone networks, these companies fail to update their capabilities to today's requirements and the privatization and new economic policies have not helped them much, otherwise to tell they could not stand the competition without the help of Government. The privatization has helped Indian private sector to large extent, but Indian private telecom equipment companies gone invisible in world telecom equipment market or moved over as service providers.

By acquiring lot of profits in the service sector, Indian telecom companies can now think of getting into some level of manufacturing. Even domestic market alone is a huge opportunity for such ventures. The companies like Huawei and ZTE have grown mainly due to domestic market available in China.

Added to this, most of the leading telecom equipment companies have huge R&D teams based in India. They reap the local telecom-domain technical talent and also the market. They should not be blamed for this, rather it's Indian telecom industry as whole is the reason for giving them the cake baked by them.

There is significant political role in India's telecom industry. Major technology-change is still underway globally in telecom sector. There is a chance for Indian telecom industry to take some visible share in the domestic market with the clean political support.