Telecom equipment: Can India ride the 5G wave?

India’s telecom equipment sector is expected to register strong manufacturing and export growth in the coming years, with the benefits of schemes like PLI. In this article, IBT takes a look at current government incentives and key suggestions for the industry to leverage the upcoming 5G boom.


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India rolled out the 5G services on October 1, 2022 within a span of 100 days in more than 200 cities. The speed of rollout has been appreciated by industry leaders globally and is being described as the “fastest deployment happening anywhere in the world” in many international fora, stated Ashwini Vaishnaw while addressing at the Economic Times Global Business Summit 2023.

The 4G and 5G technology stack is ready now after initial testing for 1 million simultaneous calls, then for 5 million and now for 100 million simultaneous calls.

The minister said that with advancements in the sector, India is set to become one of the major telecom exporters to the world by next three years. Currently, two Indian companies are exporting telecom gear to the world, and in the coming three years, several companies are set to join the race, he added.

Current Scenario

India’s telecom sector is divided into subsectors like Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband. The industry has witnessed a significant growth of 65% in the last seven years. The number of mobile towers increased from 400,000 in 2014 to 660,000 in 2021. The number of Mobile Base Transceiver Stations has grown from 800,000 in 2014 to a whopping 2.3 million in 2021.


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According to GSM Association, India is on the road to become the second largest smartphone market globally by 2025 with around 1 billion installed devices which is expected to have 920 million unique mobile subscribers by 2025 including 88 million 5G connections.

5G use cases developed by Telecom Service Provides and start-ups in Education, Health, Worker safety, Smart agriculture etc are being deployed across the country. To enable India to lead in 5G deployment, Department of Telecommunications (DOT) has approved financial grant for multi-institute collaborative project to set up “Indigenous 5G Test Bed” at five locations – IIT Madras, IIT Delhi, IIT Hyderabad, IIT Kanpur and IISc Bangalore

India’s telecom equipment exports

India’s telecom exports have grown by 77.3% YoY to reach US$ 8.6 billion in the period April-December, 2022-23, contributing 2.5% share in India’s total exports. Smartphones accounted for the highest exports under this segment worth US$ 7,193.97 million during April-Dec, 2022-23. Machines for conversion and transmissions accounted for exports worth US$ 767.44 million, Telephones for cellular networks (US$ 153.54 million), Aerials and Aerial reflectors (US$ 100.15 million).

India’s Telecommunication instruments export value (FY 2019-22)

                Source: Ministry of Commerce and Industry, figures in US$ million

Government initiatives to boost the sector

The telecom sector is the 3rd largest sector in terms of FDI inflows contributing 6.43% of the total FDI inflows. It also contributes directly to 2.2 million employment and indirectly 1.8 million jobs. Since it has proven to be a crucial sector for India’s growth, the government has taken various steps over the years and even in the recent 2023 budget, to boost the sector. Some of the initiatives are listed below:

  • PLI scheme for Telecom and Networking Products: Introduced in 2021, the Production Linked Incentive scheme (PLI) was earmarked with ₹ 90.25 crore in the Budget 2023, although there is no allocation for FY24. In October 2021, 31 companies were provided approval under the scheme. These companies are expected to invest $450 million, generate 40,000 jobs and incremental production of over $24.4 billion.
  • 100 labs for 5G solutions: The recent budget 2023 announced the launch of 100 labs for the development of 5G solutions which will create new range of opportunities for the sector. It will provide solutions for rapid prototyping of 5G use cases along with segments that include manufacturing, transportation, healthcare, retail etc.
  • Atmanirbhar Bharat Scheme: The Atmanirbhar Bharat scheme aims to promote ecosystem for research and development and make India a global hub of development of technologies and manufacturing of telecom equipment including Core transmission Equipment, 4G/5G Next Generation Radio Access Network etc.
  • Satellite Broadband Services: Under this service, BBNL and BSNL are using ISRO’s HTS satellites GSSAT-11 and GSAT-19 under BharatNet project to provide connectivity to about 6700 GPs/areas which were not accessible through other mediums. Depending on the exact scope of technology used, satellite backhaul can be deployed quickly, without the need to build the costly and technologically challenging infrastructure.

Under PLI Scheme for telecom and networking products, 42 companies have committed investment of
Rs. 4,115 crores, additional sales of Rs. 2.45 Lakh crores and employment generation of more than 44,000 over
the scheme period. Against this target, achievements from April 2021 to October 2022 were
cumulative investment of Rs. 952 crores, sales of Rs. 16,313 crores and employment of 11,847 numbers. These companies include Nokia, Samsung, HFCL and Tejas Networks. It later amended the scheme to accommodate existing design-led manufacturers. Existing companies were allowed to add more products with additional incentive of 1% over existing rates.

Under Aatmanirbhar Bharat initiative of DoT, the aim is to deploy end-to-end indigenously developed
telecom technology products. A 5G Alliance & IoT Innovation Centre has been launched by Centre for Development of Telematics (C-DoT) to support multiple Indian startups and MSMEs for developing open radio access network (RAN) compliant 5G equipment.

While there is a strong push by the government through PLI, some adaptations have been proposed in the scheme design, as discussed in this article. For instance, a gestation period for investment can be included in the case of greenfield production so they have adequate timelines to achieve the targets. Moreover, the scheme should encourage higher investments in R&D and promote development of India-specific patents, thereby enabling India to emerge a leading innovator in the 5G space.

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