The Hindu Business Line : Alcatel tech for domestic manufacturer

THE telecommunications equipment industry expects many mobile makers to set up base in India because of growing cellular subscriber base and tax waivers.

The Telecom Equipment Manufacturers Association (TEMA) president, Mr N.K. Goyal said Alcatel had already signed a MoU with a leading manufacturer in the country for transfer of technology for making mobile phones in the country.

Mr Goyal said the Government had waived 16 per cent tax on mobile phones being made in India which would lead to the manufacture of handsets in the country. The Government did not levy any duties on imported handsets, Mr Goyal said.

Global manufacturers like LG already make CDMA handsets in the country. But leading handset maker Nokia had earlier decided not to make handsets in the country, citing poor growth in the cellular subscriber base.

Mr Goyal said the sale of equipment in the country was around Rs 15,000 crore every year which is expected to jump to around Rs 50,000 crore because of rapid growth in cellular subscriber base. The manufacture of handsets in India would also lead to substantial reduction of handset prices, he said.

He said the Government should set up a telecom finance corporation similar to that of power finance corporation to fund vendors of equipment. Mr Goyal said only about 30 per cent of the total capacity in the industry was currently utilised which is leading to huge losses for the players.

Mr Goyal said even though the industry was committed to WTO which envisages zero duty regime by 2005, the inverted duty structure had hit the industry hard. "The Finance Ministry is suffering from the mindset that any reduction in the customs duty on inputs and components may lead to loss of revenue," Mr Goyal said.

Mr Goyal said with the Government announcing a comprehensive purchase procedure agreement between BSNL, MTNL and telecom equipment manufacturing industry, the segment would see a huge growth. He said both the manufacturers and BSNL and MTNL had agreed for adherence to delivery period, expeditious payments for suppliers and resolution of demands like performance bank guarantee, provisional prices etc.

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