In 1999, there was an article in one of India's leading business newspapers, which said that private operators will take about 10 years to come anywhere close to the government-owned incumbent telcos. According to pundits at that time, it was a little conservative. Five years later, at the end of fiscal 2003–04, one realized that the projections were not too bad.

Among the top telecom groups, vis-à-vis Rs 30,667 crore of business that the DoT as a group (BSNL and MTNL) did last year, the private groups (Tata, Bharti, Reliance, Hutch-not including revenues from equipment) did about Rs 16,065 crore. Well, that is about 52 percent. Private operators are almost half the size of incumbents today, and will catch up in the next five years' time, if not earlier.

Unfortunately, the picture is totally different in equipment. We have only ITI, which used to manufacture on a big scale. It too, has come down over the years. Therefore, on the equipment side, at a time when the overall equipment market size in FY 2003–04 was Rs 30,338 crore, the government versus private ratio was too much tilted towards private. Except for ITI, there were hardly any others. While private and Indian players have really made it big in telecom services, they have completely ignored equipment manufacturing.

Telecom equipment and manufacturing seem to be slipping fast from the hands of the government too- whatever little there was. In fact, it is going out of the hands of even private Indian manufacturers. Actually, without distinguishing between Indian and MNC manufacturers, the point is that local manufacturing is going down. And at this rate, manufacturing might completely stop in India. That is not a good thing to happen in a market where customers and demand for telecom services is shooting up. This is not what is happening in China. Manufacturing is such a big opportunity that India is missing out on. Also, it is not just about manufacturing. It is about support and repairs too. Today, even a minor fault in a cellphone cannot be rectified in India, where several million phones are sold every month. It has to be simply thrown away. Similarly, a small problem with any network equipment, and it needs to be shipped out of the country-a country where Rs 30,338 crore of equipment was sold last year.

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So, it is not just about manufacturing plants not getting set up. It is about a whole lot of ancillary units that could come up around them. Remember the Maruti story? It is also about selling equipment worth billions of dollars to millions of people, and then not being able to provide repair and maintenance.

The latest union budget has also been of no relief. Telecom manufacturers say that the budget will not help them, but will actually ensure a faster exit. Unfortunately, both TEMA and MAIT are not very strong lobbying bodies. Besides that, the government as well as the policy makers have sort of given up on manufacturing. It is the last chance available before local manufacturers to really try and do something. For instance, TEMA and MAIT working together along with ELCINA might be a good option. There is news once again, of some new private initiatives in domestic manufacturing. These have to be pushed through and helped.

Ibrahim Ahmed