Indian telecom industry's best days are ahead as the country is entering in to an exciting phase by 2012 with new investments which amount to over $1.5 bn for telecom R&D (which would include expansion of the existing centers and entry of R&D centers). Against the common perception that India has been a loser as far as R&D spends by telecom companies is concerned, a new study by the consulting and research firm, Knowledgefaber says that the trend of increasing R&D investments by domestic companies in emerging countries like India, China and Russia is expected to boost the global R&D spend.
According to Knowledfaber's report-'In-depth Analysis of Telecom R&D in India: An MNC and Vendor Perspective'-telecom R&D spend is expected to grow due to 3G, 4G/WiMax, LTE deployments all over the world, boosting equipment and telecom devices demand. The report is the outcome of Knowledgefaber's research on 500 global telecom companies across the telecom value chain, tracking their R&D spends and footprint worldwide over the past two years.
The report says that in 2009, global players across the telecom value chain spent close to $38 bn on R&D. Of the total global R&D spend, about one-fourth is off shored to low cost countries like India and China. India's share in the off shored telecom R&D is around one-third of the low cost countries' share for 2009. About 52% of the Indian telecom R&D market is captured by R&D vendors and service providers, both MNC and domestic like Aricent, TCS, Tech Mahindra and HCL.
Currently, Indian telecom R&D services stand at $3.1 bn for 2009 (including telecom R&D service providers and MNC R&D centers). Some of the existing R&D centers like ZTE, Nokia Siemens Network, Nokia, Huawei, etc, have huge expansion plans for India. In fact, Nokia Siemens Network inaugurated their new expanded development facility in Bengaluru in February 2010.
Bengaluru is the favorable location for setting up a telecom R&D center in India and has over over fifty R&D centers.
“Mumbai and Pune are not the best choices today, but they are the emerging cities for telecom R&D. Currently, both cities combined have eleven R&D centers. Also, they have good infrastructure (tech parks or space available; rail, road and airport connectivity) and favorable city ecosystem (educational institutes, recruitment firms and support to ex-pats),” says Amit Gupta, CEO, Knowledgefaber.
“These two emerging cities have a very small base of installed talent for telecom R&D, but a sizable pool of fresh engineering graduates and good infrastructure which can attract new R&D centers to the city,” he says.
Tata DOCOMO-the joint venture between Tata and NTT DOCOMO-set up its VAS R&D center in India in 2009; and Blue Coat US based application delivery networking vendor opened their R&D center in the country in February 2010.
Huawei is planning to invest $500 mn in the Bengaluru R&D center over the next five years and will be employing around 5000 more people from the current level of 2000 R&D employees. ZTE would spend $1 bn on R&D worldwide, out of which 10%-$100 mn-is set aside for Indian R&D in the calendar year 2010.
heenaj@cybermedia.co.in
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