Rapidly changing telecom technology threatens manufacturers

Monday, 14 July 2003, 19:30 IST
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NEW DELHI: Users may be rejoicing at the choice of services opening up in India with rapidly changing telecommunications technologies, but indigenous equipment manufacturers unable to keep pace are in the doldrums. "The pace of technology change from wire to wireless has been very sudden, giving equipment manufacturers little time to adapt," said P.K. Sandell, founder president of the Telecom Industry and Services Association of India. "The situation is so bad that two of the six major manufacturers, including the Indian unit of Japan's Fujitsu, have had to close their telecom equipment manufacturing operations and the others are facing a grim future," Sandell told IANS on the sidelines of a workshop here. Rapidly changing technology has seen a boom in cellular users in India with the subscriber base rising by one million every month, telecom experts said. From having the seventh largest telecommunications network a few years ago, billion-strong India is currently in the fifth place with a tele-density of five per 100, and 1.5 per hundred in rural areas. But telecom equipment manufacturers are having a bad time because they are unable to keep pace with demands in this era of fast changing technologies. They say they need about three years to make adjustments. S.K. Manocha, director of research and development at state-owned ITI Limited, said the problem is not just the switch from wire to wireless technology. "Even in mobile technology there have been changes in customer detail specification. After several rapid changes, a plateau on standards has been reached. Now is the time for manufacturers to change to the market requirement and invest," said Manocha. Added Anil Khosla, vice president of marketing and systems sales Alcatel India: "While we were prepared for wireless technology, the unclear policies and the inverted customs duty structure that makes import of equipment cheaper than components has made the switchover very difficult. Manufacturers, including Alcatel, currently face an uncertain future." Experts say that like China, India should make it mandatory for telecom service operators to use products made by local manufacturers. "With almost 90 percent of the equipment currently being imported, the manufacturing units of companies like Siemens, Alcatel, Ericsson and Lucent in the country are running at just 30 percent of their capacity," said Sandell. Against the current manufacturing volume of around 150 billion, of which about 60 billion is switches for landline services, the manufacturing demand is expected to dip to 130 billion worth this year. The major clients of these manufacturing units were state-owned Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL), which too have followed private operators into wireless technology with great success. "Come January, the employment base of these telecom manufacturers in India is likely to collapse, affecting the livelihood of around 7,000 people," Sandell warned.
Source: IANS