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Indian government at odds with telcos on 5G procurement

Bharti Airtel has hit a major 5G customer milestone, but its network rollout does not fit with the Indian government’s efforts to encourage the design and manufacture of 5G kit within its borders.

Earlier this week, the Ministry of Communications shared that it has approved 42 companies to receive financial incentives under its production-linked incentive (PLI) scheme for telecom and networking products, sharing a total of 41.15 billion rupees (US$495 million).

The scheme, which feeds into Prime Minister Narendra Modi’s ‘made in India’ agenda, was extended earlier this year to offer additional incentives for design-led manufacturing with a view to building an Indian 5G ecosystem; 17 companies have thrown their hats into the ring for that element of the PLI. The ministry revealed.

The overall list of 42 includes some big global names – Samsung and Nokia being the most high-profile – plus other Indian and overseas companies, including 28 small and medium-sized enterprises, or MSMEs, as India dubs them, the ‘M’ standing for micro.

“The enthusiastic response from domestic and global manufacturers to the concrete steps taken by Government of India to encourage manufacturing in telecom equipment indicates strong confidence in initiatives of the Government,” the Ministry of Communications declared. “India is poised to emerge as design and manufacturing hub for telecom and networking equipment.”

The trouble is, the telcos haven’t yet got the memo.

While the government was extolling the virtues of its telecoms PLI scheme, Bharti Airtel revealed that it has passed 1 million 5G customers on its network…a network that is certainly not made in India.

The telco is – understandably – bigging up its achievement, noting that it hit the milestone less than a month after launch and while its 5G infrastructure is still being built out.

“These are early days but the response from customers have been very encouraging. Our network is being built every day even as all 5G devices are now capable of working on the Airtel 5G Plus network barring a few exceptions which should also be done in the coming weeks,” said the telco’s CTO Randeep Sekhon. “We will continue to advance our network with a vision to connect the entire country.”

Airtel goes on to list the “three compelling advantages” its 5G Plus service has for customers, the first essentially being that it is not made in India.

“It runs on a technology that has the widest acceptance in the world with the most developed ecosystem. This ensures that all 5G smartphones in India seamlessly work on the Airtel network,” the telco said. The other two are higher speeds and lower power consumption, incidentally.

Ouch. That’s a bit of a kick in the guts for the government, the two announcements coming within days of each other.

And of course, Bharti isn’t the only one to have passed up Indian-made 5G kit, at least for now.

Mobile market leader Reliance Jio Infocomm, whose parent company is building an end-to-end 5G platform that it is looking to sell overseas as well as at home, has famously signed up Nokia and Ericsson to roll out its own 5G network.

India is making a lot of noise about becoming a key centre for 5G technology – and looking ahead to 6G – but it is still seriously at risk of being left behind.

 

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