Introduction: Manufacturing Telecom and Networking Products in India
India’s telecom and networking sector is a crucial contributor to the country’s economic growth and development. It plays a vital role in connecting people and businesses across the country and enabling the exchange of information and ideas.
The telecom sector in India has seen significant growth over the past few decades, driven by the increasing demand for telecommunications products and services such as proliferation of mobile phones and the increasing adoption of data services and the government’s efforts to expand and improve the country’s telecom infrastructure. India is home to many leading telecom companies, including Bharti Airtel, Reliance Jio, and Vodafone Idea, which offer a range of services, including voice, data, and broadband.
The Telecom industry in India is the second largest in the world with a subscriber base of 1.17 billion as of August 2022 (wireless + wireline subscribers). India has an overall tele-density of 85.15 %, of which, the tele-density of the rural market, which is largely untapped, stands at 58.44% while the tele-density of the urban market is 134.71%.
The growth of the internet and mobile data services has also enabled the development of a thriving digital ecosystem in India, with a growing number of startups and e-commerce companies.
The networking sector in India is also a key contributor to the country’s economic growth and development. Networking companies in India provide a range of products and services, including routers, switches, and other networking equipment, as well as network design, installation, and maintenance services. Leading networking companies in India include Cisco Systems, HPE, and Juniper Networks.
Products Manufactured Under the Telecom and Networking sector
The telecom and networking sector in India produces a wide range of products and services, including:
- Telecommunications services: This includes voice and data services, such as telephone, mobile, and broadband services, as well as satellite and other specialized communication services.
- Networking equipment: This includes hardware and software products that enable the creation and operation of computer networks, such as routers, switches, hubs, firewalls, and network security systems.
- Data center and cloud services: This includes infrastructure and services that enable the storage, processing, and management of large amounts of data, such as servers, storage systems, and virtualization software.
- Internet of Things (IoT) products and services: This includes products and services that enable the connection and communication of devices and systems over the internet, such as sensors, gateways, and software platforms.
- Software and applications: This includes a wide range of software products and services for the telecom and networking industry, including operating systems, network management software, and applications for mobile devices.
- Consulting and professional services: This includes a range of services that support the planning, design, deployment, and maintenance of telecom and networking systems, such as engineering, consulting, and training services.
- Mobile phones and related accessories: This includes a wide range of products, such as smartphones, feature phones, and accessories like cases, chargers, and headphones.
- Other telecommunications equipment: This includes various equipment used in the telecom industry, such as antennas, cables, modems, and other specialized hardware.
India’s telecom and networking sectors involve the production of a range of products and equipment, including telecommunications equipment, networking devices, and other related products. The raw materials used in manufacturing these products vary depending on the product being produced and the manufacturing process used. Some common raw materials used in the telecom and networking sectors in India include:
- Metals: Telecommunications and networking equipment often includes components made of metals such as aluminium, copper, and steel. These metals manufacture components such as chassis, connectors, and cables.
- Plastics are commonly used in manufacturing telecom and networking equipment, particularly for components such as casings and connectors.
- Electronic components: Telecom and networking equipment includes various electronic components such as semiconductors, resistors, and capacitors. These components perform various functions within the equipment, such as processing data and transmitting signals.
- Glass: Glass is often used in manufacturing telecom and networking equipment for components such as display screens.
- Chemicals: Certain chemicals may be used in manufacturing telecom and networking equipment, such as solvents for cleaning, etching, or plating.
National Industrial Classification (NIC) & National Classification of Occupations (NCO) of the Telecom and Networking sector
The National Industrial Classification (NIC) is a system used by the Government of India to classify industries based on their type of activity. The government uses the NIC for various purposes, including data collection and statistical analysis, as well as for developing policies and programs related to different industries. According to the NIC, the telecom sector is classified under the following code:
NIC Code 61: Telecommunications, broadcasting, and information service activities. This code includes a wide range of activities related to the telecom sector, including:
- The provision of telephone and telegraph services
- The operation of mobile phone networks
- The provision of internet services
- The operation of data centres
- The provision of satellite communication services
- The operation of radio and television broadcasting services
The telecom sector is classified under the “Communication and Broadcasting Services” sector, according to the National Classification of Occupations (NCO) published by the Ministry of Labour and Employment. The NCO is a standardized system for organizing and classifying occupations in India.
Within the Communication and Broadcasting Services sector, several sub-sectors relate to the telecom industry, including:
- Telecommunication services: This includes occupations related to the operation and maintenance of telecommunications systems, such as telephone exchanges, radio and television broadcasting stations, and satellite communication systems.
- Internet services include occupations related to the operation and maintenance of internet service providers (ISPs) and other internet-related services.
- Data processing and related services: This includes occupations related to the processing and managing of data, such as data entry and analysis.
- Cable and satellite TV services include occupations related to the operation and maintenance of cable and satellite television networks.
- Other communication and broadcasting services: This includes occupations related to other communication and broadcasting services not covered by the other sub-sectors.
Some examples of occupations in the telecom sector that might be classified under these sub-sectors include telecom technicians, network engineers, customer service representatives, and data analysts.
Leading states in the Telecom and Networking industry
Several states in India have a strong presence in the telecom and networking sector manufacturing. Some of the states that have a significant presence in this sector include:
- Tamil Nadu: Tamil Nadu is home to several leading telecommunications equipment manufacturers, including Nokia, Ericsson, and Samsung.
- Maharashtra: Maharashtra is home to several telecom manufacturing companies, including Huawei, ZTE, and Reliance Jio.
- Gujarat: Gujarat is home to several telecom manufacturing companies, including Vodafone Idea, Reliance Jio, and Tata Communications.
- Karnataka: Karnataka is home to several telecom manufacturing companies, including Nokia, Ericsson, and Samsung.
- Andhra Pradesh: Andhra Pradesh is home to several telecom manufacturing companies, including Tata Teleservices and Reliance Jio.
The telecom sector in India requires a range of infrastructure to manufacture telecommunications equipment and provide telecom services. Some of the key infrastructure requirements for the telecom sector in India include the following:
- Physical infrastructure: This includes facilities such as factories, warehouses, and offices that are required to produce and distribute telecom products and services.
- Power infrastructure: The telecom sector requires a reliable and consistent power supply to ensure the smooth operation of manufacturing and service delivery.
- Transportation infrastructure: The telecom sector requires a well-developed transportation network to facilitate the movement of raw materials, intermediate products, and finished goods.
- Communication infrastructure: The telecom sector requires a robust and reliable communication infrastructure, including telecommunications networks, data centres, and internet connectivity, to support the production and delivery of telecom products and services.
- Human resources: The telecom sector requires a skilled and trained workforce to design, develop, and manufacture telecom products and deliver telecom services.
Production Linked Incentive (PLI) Scheme
It is expected that the implementation of the Production Linked Incentive (PLI) Scheme will have a positive impact on the telecommunications and networking industry in India. It is expected to lead to increased investment in the sector as companies take advantage of the incentives provided by the scheme to set up or expand their manufacturing operations in India. This, in turn, is likely to lead to the creation of new jobs and the development of a robust domestic supply chain.
Department of telecommunication has extended the Telecom and Networking Products PLI scheme to 42 beneficiary companies with a total committed outlay of Rs. 4,115 crores. Incremental production is expected to be around Rs. 2.45 lakh crore, and PLI aims to generate 44000 employments in the telecom and networking sector.
The telecom and networking industry in India is expected to continue to grow and evolve in the future. One critical development is the rollout of 5G, the next generation of mobile network technology, which is expected to enable faster data speeds and more efficient communication. The Internet of Things (IoT) adoption is also expected to increase, leading to new opportunities for telecom and networking companies in the country. The digital transformation of various industries is expected to drive increased demand for telecom and networking products and services. The government will likely continue investing in expanding and improving the country’s telecom and networking infrastructure. India’s telecom and networking industry is also expected to become increasingly competitive, with the entry of new players and the growth of existing ones. This could lead to new offerings and lower prices for consumers.
Overall, a well-developed infrastructure is essential for the growth and success of the telecom and networking sector in India. It will enable companies to produce high-quality products and services efficiently and effectively and to meet the increasing demand for telecommunications products and services in the country.
Anurag Dhole is a Research Intern at Tatvita. Presently he is pursuing his bachelors in the Liberal Arts department at the Savitribai Phule Pune University.