Telecom gear makers increase investment because of govt incentives

As demand for 5G equipment soars as Reliance Jio and Bharti Airtel roll out their networks, international companies like Nokia and Jabil (for Ericsson) and India’s Tejas Networks have increased investments totalling more than Rs 500 crore under the telecom equipment production-linked incentive (PLI) scheme.

According to telecom department officials who are aware of the situation, these companies have also chosen to change the year of their program to begin from FY22-23 instead of FY21-22, forgoing their incentives for the year ending March since it was a requirement to change timeframes. However, because of improved productivity, they will receive significantly higher benefits over the new five-year period of the scheme, according to the officials.

For the updated PLI plan, the department of telecommunications (DOT) has in total collected extra investments of Rs 770 crore, including contributions from new participants.

42 companies, including 28 MSMEs, have been chosen for the upgraded telecom PLI scheme according to DoT. 

17 businesses out of the chosen ones have applied for an extra 1% incentive based on design-led manufacturing standards. The firms have committed a total of Rs 4,115 crore in investments. 31 enterprises with estimated investments of Rs 3,344.90 crore had been chosen when the scheme was first launched last year.

As Reliance Jio and Bharti Airtel roll out their networks, Nokia and Ericsson have increased the manufacture of 5G equipment in the nation. The majority of the equipment for both telecom companies comes from European suppliers.

Since Indian operators had not yet begun rolling out 5G, the production targets were a little modest when telecom equipment companies applied for the PLI scheme last year.

The nation’s manufactured 5G technology was exported. However, since the introduction of 5G services in India on October 1, the scenario has altered. The telecoms are currently quickly scaling up sites to give 5G coverage throughout the nation.

The carriers hope to add 10,000 5G sites per week in 3–4 months, up from about 2,500.

Vodafone Idea intends to begin laying its 5G network in the upcoming months and is already testing 5G in some areas.

However, the corporation has not yet disclosed network vendor agreements.