Shourie hits hard at telecom manufacturers

NEW DELHI: Minister for IT and Communications, Arun Shourie lashed out at telecom equipment manufacturers for asking for duty protection instead of focusing on increasing production. Speaking at the Annual meeting of the Telecom Equipment Manufacturers Association (TEMA), Shourie urged Indian telecom equipment manufacturers to invest more in R&D activities, expand the scale of production and become competitive on their own.

It is not sufficient to keep asking the government to bail out the industry. He alluded the auto component industry, which has made remarkable progress in exports despite the global slowdown without any government help and subsidies. The manufacturing sector and the steel industry have also made dramatic turnaround with persistent efforts.

"It is time for the telecom manufacturing industry to focus on innovation and invest in R&D activities," said the Minister. He referred to the huge investment in R&D by Intel, SAP and other multi-nationals in India. "India has a huge talent pool with a large number of PhDs available and telecom manufacturers would do well to invest in R&D activities," Shourie said.

He also urged TEMA to identify the issues, which the industry faced in its transition from one technology to another so that the government can step in to help the industry in the transition.

Shourie also warned the industry to develop other clients and markets instead of just depending on MTNL and BSNL as their mainstay. "With increasing competition from private telecom operators, the telecom PSUs are also coming under immense pressure and therefore it is not safe to put all the eggs in one basket," he advised.

The Minister said that the telecom industry is growing very fast and the decision of the Group of Minister to allow intra-circle mergers amongst telecom companies is further expected to boost the health of the industry.



He also quickly recapitulated some important decisions, which the GoM had taken earlier in the day. This included allowing foreign investment limit in telecom companies to be hiked to 74 percent from the existing 49 percent. FDI would remain at 49 percent while the incremental foreign investment allowed is the FII investment with the management control in Indian hands. Intra circle mergers are to be allowed provided there are more than three operators in a circle to avoid a monopolistic scenario.

(CNS)