An Appeal by faculty Members from IITs, IISc and IIMA to DOT to

An Appeal by faculty Members from IITs, IISc and IIMA to DOT
to urgently set-up and operationalise
Telecom Research and Development Fund (TRDF) and
Telecom Entrepreneurship Development Fund (TEDF)
1. The Indian Telecom sector has witnessed spectacular growth in the
last two decades. Today, the total number of cell phone subscriptions
is in excess of 850 Million. The total revenue due to mobile services is
more than ₹170,000 crores per year. This impressive growth has
been in part due to several innovative business models developed by
telecom operators. We have achieved an impressive tele-density
close to 75% and ours is the second largest telecom market in the
world, next only to China.
2. However this growth story has been scripted largely with significant
dependence on equipment imports.
The demand for telecom
equipment was close to a whopping ₹75000 crores in the year 201213. This is projected to grow to more than ₹170000 crores1 by 201920. A majority of this demand is met by importing equipment from
abroad. Today, the telecom trade deficit stands at 70% of the total
demand implying thereby that the majority of equipment being
bought by telecom operators is manufactured outside India. To this
one needs to add the import of subscriber equipment, including cellphones, tablets and lap-tops used to access the telecom network. In
2013, about 150 million cell phones were imported at a total value of
nearly 30,000 crores2. As a result, there is a high outflow of foreign
exchange. Our growth story has been driven more by increased
consumption of imported technologies and products rather than by
innovations within the country.
3. Even in those cases where some equipment is manufactured or
developed in India, the components and devices are almost always
100% imported, and Indian Intellectual Property (IP) embedded in
the equipment is marginal. This has happened despite India being
recognized as having one of the largest talent pools of system,
software and chip design engineers. All major telecom technology and
1
http://www.thehindubusinessline.com/industry-and-economy/info-tech/govt-notifies-policy-to-encouragemade-in-india-telecom-products/article3978517.ece
2
http://www.infodriveindia.com/india-mobile-phone-imports.aspx
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semiconductor chip companies have set-up their captive design
centres in India. Besides there are large Indian companies carrying
out designs for telecom multinationals as a service. The Intellectual
Property Rights (IPR) and product designs are however owned by the
multinational companies that sell the products back in the Indian
market. The proliferation of these companies shows that Indians have
indeed learnt to design world-class telecom products today. However,
there are very few Indian companies that are able to tap this talent to
develop their own products and IPR. We do not have enough Startups that focus on products, even though there is large demand for
products in India.
As a result of Nokia, Ericsson, Karbonn Mobiles and other companies
getting assembling and manufacturing done in India, we have built up
a reasonable manufacturing infrastructure here. However, the value
addition of indigenous manufacturing is still very low.
4. Telecom technology development is heavily driven by intellectual
property rights (IPR), innovations, patents and standards. World over,
countries are increasingly becoming aware of IPR. They are even
using IPR reserves to position their trade policy and influence
international standards. Today, in 4G technology, almost 40% of IPR
is being held by Asia-Pacific. In earlier generation technologies,
majority of IPR used to be held by companies from the western world.
Several Asia Pacific countries (particularly Chinese companies) have
gained significant global market share with proactive state support for
R&D, long term customer financing at low interest rates and tax
incentives.
Despite this tilt towards Asia-Pacific, India’s contributions in global
telecom IPR is practically nil.
5. India has all the key ingredients for becoming a global technology
player, namely (a) a strong talent pool in industry and academic
institutions; (b) a very strong and vibrant, though small, R&D ecosystem in IITs, IISc and other institutions; (c) software being the key
differentiator in telecom products and India being a software power;
(d) a large domestic market. What is needed is a strong
entrepreneurial eco-system that includes
proactive government
funding for R&D, IPR and product development. While the Indian
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companies need to be encouraged to use India-owned IPRs and carry
out product design, start-ups are needed to take up innovative
products which could make a huge difference to India. Being the
second largest telecom market, India is well poised to lead
innovations in areas such as energy efficiency and green telecom
which will not only reduce carbon foot print but will also lead to
economic efficiency.
6. The need for thrust on IPR creation, product development and
manufacturing was recognized in the National Telecom Policy (NTP)
2012 (Refer Section 2 of NTP 2012). NTP 2012 also proposed to set
up a Telecom Standards Development Organisation (TSDO) to
promote Indian IPR and take it to international standards.
Subsequently, Telecom Standards Development Society (TSDSI) has
been set up as India's TSDO.
7. It was also proposed in NTP 2012 to create funds for product
development, IPR generation and manufacturing. These funds include
i.
ii.
iii.
Telecom Research and Development Fund or TRDF (to promote
R&D towards IPR and promote product development)
Telecom Entrepreneurship Development fund or TEDF (to
promote start-ups in the area)
Telecom manufacturing promotion fund or TMPF (to promote
manufacturing in India).
A committee was also set up by DoT to develop the blue print of
TRDF, TEDF and TMPF. The committee submitted its report in early
2013.
8. The government funding for telecom product development will create
pull-through effect for overall electronics manufacturing eco-system
thereby resulting in reduced import-bill and bridging of trade deficit.
The growth of telecom manufacturing sector will also result in large
scale job creation.
9. Apart from the economic angle, there is strategic angle as well.
Imported telecom equipment can pose big security threat. Today,
telecom networks are considered as strategic infrastructure.
Equipment deployed in such networks could have potential malware in
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it, which could even be triggered from outside India. This could
seriously jeopardize national security.
10. In India, the government has garnered huge funding through
spectrum auctions, telecom revenue-share and licensing charges. In
future, the government is likely to earn even more through auctions
and licensing fees. It is imperative that a part of these earnings is
used to strengthen Indian IPRs, telecom products and manufacturing.
The government must create and operationalise TRDF, TEDF and
TMPF without any delay. The strengthening of telecom product and
entrepreneurship ecosystem will have long-term fiscal benefits.
We, the undersigned faculty from IITs, IISc and IIMA, urge the DoT to
take immediate steps to operationalize TRDF, TEDF and TMPF. This will
catalyse the manufacturing eco-system and make us self-reliant in
telecom technology for commercial and national strategic use. This will
also realise our potential to become a global technology player. The delay
in setting up such funds will cost us dearly. Time is just ripe for us to
shape the contours of future telecom evolution.
Signatories3 (in alphabetical order):
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Contact Prof. Ashok Jhunjhunwala, IIT Madras [email protected] for any clarification regarding
the statement
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1.
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18.
A.K.Chaturvedi, IIT Kanpur
Abhay Karandkar , IIT Bombay
Aditya Jagannatham, IIT Kanpur
Adrish Banerjee, IIT Kanpur
Ananjan Basu, IIT Delhi
Animesh Kumar , IIT Bombay
Ashok Jhunjhunwala, IIT Madras
Bhaskar Ramamurthi, IIT Madras
Bhaskaran Raman, IIT Bombay
Brejesh Lall, IIT Delhi
David Koilpillai, IIT Madras
Devendra Jalihal, IIT Madras
Dharmendra Singh, IIT Roorkee
G. Venkatesh, IIT Madras
G. Raghuram, IIM Ahmedabad
Gautam Das, IIT Kharagpur
H. S. Jamadagni, IISc Bangalore
K. Giridhar, IIT Madras
19.
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Kameswari Chebrolu, IIT Bombay
Ketan Rajawat, IIT Kanpur
M. R. Muralidharan, IISc Bangalore
M. V. Kartikeyan, IIT Roorkee
N. Balakrishnan, IISc Bangalore
Priyadip Ray, IIT Kharagpur
R. Venkatesh, IIT Madras
Radha Krishna Ganti, IIT Madras
Ranjan Bose, IIT Delhi
Rekha Jain, IIM Ahmedabad
S. N. Merchant, IIT Bombay
Saswat Chakrabarti, IIT Kharagpur
Sebastian Morris, IIM Ahmedabad
Shankar Prakriya, IIT Delhi
Sidharth Sinha , IIM Ahmedabad
Suvra Sekhar Das, IIT Kharagpur
T. V. Prabhakar, IISc Bangalore
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