Country’s telecom sector has witnessed a phenomenal growth during the last decade. India’s T Country’s telecom sector has witnessed a phenomenal growth during the last decade. India’s tele-density has increased to 43.5 per hundred in 2009 from a minuscule 2.2 in 1998. Technology, conducive government policies and political will have been the major drivers of this growth. Its multiplier effect on the economy is now well understood, recognized and appreciated.
The country has to pay gratitude to Mr Rajiv Gandhi for visualising the importance of computers, information technology and state-of-the-art digital communication networks as the engines of growth in 1980s. He initiated the process of creating an ecosystem for integrating new technologies into our antiquated systems. In 1984, Sam Pitroda was invited to set up a Centre for Development of Telematics (C-DoT ), an R&D facility for development of products for telecommunication networks. His team successfully developed a world-class digital switch capable of performing even in extreme climatic conditions. Quite a few Indian companies were licensed to manufacture these switches, thus creating a huge indigenous manufacturing base. In 1990s, cellular wireless telecom services were liberalised. With decrease in tariffs, volumes increased manifold at the cost of landlines. The demand surge from 2004 to 2009 was exceptionally steep: the number of mobile subscribers grew from six million in 2001 to about 500 million in 2009 whereas landlines increased from 33 million to 38 million only during the period. This sudden shift towards mobile phones took indigenous equipment makers by surprise, and with non-existent R&D in the mobile field, they found themselves without work. The field was thus open for the foreign players to step in.
If we look at telecom equipment manufacturing in the country, especially in the cellular sector, the picture, unfortunately, is dismal. We do produce low technology items, but our presence in manufacturing core equipment is depressing. Even for a giant like ITI, sourcing of technology was difficult. ITI tried to acquire know-how from multinational corporations, but the level of integration it could get was low. We have practically been reduced to the status of traders.
The only equipment of note that is being designed and manufactured in the country is optical terminal equipment meant for transporting signals over long distances on optical fibre cables by selected manufacturers. They have even been able to export their products as they have a good backup R&D support.
Sustenance of growth in telecom services depends on our capabilities in maintaining telecom networks. At present, GSM and CDMA networks, whether in public or private domain, get third level of support from foreign technology providers that have free access to our networks. In the event of hostility or an act of war, the consequences can be serious: silencing of all mobiles. Thus, for national security, it is imperative that we get products along with technology that go into making of the networks.