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Telecom equipment maker Tejas Networks said that the roll-out of policies such as Preference to Make in India (PMI), Production Linked Incentive (PLI) scheme, Trusted Equipment Sourcing norms can help India emerge as a global powerhouse in telecom products.
The company’s CEO & MD Sanjay Nayak told BusinessLine that the “various forward-looking policies of Government of India will help nurture country-champions in telecom equipment.”
He, however, added that the absence of global branding of Indian technology products unlike IT services does pose a challenge for Indian vendors to scale-up of international sales.
Speaking about Tejas Networks, Nayak said that access to the large talent base in India has helped the company maintain a high R&D productivity. “Our R&D cost per head is still only about 25 per cent of our global peers. Besides, our R&D efficiency comes from our very high degree of design-use, ownership of Silicon-IP building blocks for our hardware, a common code-base for all our software and a highly automated test/quality system.”
Global sales
Over the years, the company has increased its share of Indian private and international sales while bringing its reliance on Government projects down. During FY20-21, the company’s business from the international markets grew 60 per cent YoY and bookings by 103 per cent YoY. Tejas Networks, nonetheless, remains a key supplier of mission-critical telecom equipment to the utility sectors such as the Railways, Oil & Gas and Power. It expects to bid for upcoming government projects such as BharatNet Phase-3.
While admitting that the business is cyclical, Nayak explained that it is largely so because of the volatility in orders from the inherently lumpy government projects. “As we broaden our customer base, especially in international, we expect to reduce this fluctuation and bring more consistency in our operations,” he pointed out.
The company expects to leverage the ₹12,915-crore PLI scheme for telecom equipment makers once the Department of Telecom issues the operating guidelines.
Nayak said that India has one of the lowest ARPUs for both mobile and fixed broadband services in the world and hence it is a tough market for the telecom equipment vendors like theirs.
“We took this as a challenge and ensured that our products are highly competitive in technology as well as price so that even at India’s low prices, we can build a viable business. This enables us to be far more profitable as we expand in international markets, which offer much higher margins for the same products,” he said.
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