Industry will gain with 5G rollout and telecom PLI: DoT secretary

After the government, last year expanded the scope of the production-linked incentive scheme for telecom and networking products, it expects the scheme to materialise in full swing this year, largely on the back of rollout of 5G services. Telecom secretary K Rajaraman, in an interview with Fe’s Jatin Grover tells that the key priority this year will be to boost the manufacturing ecosystem at the local as well as large manufacturers’ level and that the PLI scheme will play a major role in achieving that. Another priority area would be to accelerate 5G rollout and provide 4G connectivity to the last mile. Excerpts:

Q. What are the main priority areas for the department of telecommunication this year?

A. The most important priority will be implementation of the 4G saturation project to ensure that the rural and uncovered areas get 4G connectivity, which can be upgraded later on to 5G. Second, would be to accelerate the 5G rollout. At present, over 70,000 sites are already 5G ready. So, this year, we will see a more complete and distributed coverage happening across the country. Third, is building up the manufacturing ecosystem. The launch of the PLI and the Telecom Technology Development Fund are two steps in this direction, where we want India-designed and manufactured products. So this year, we will see the PLI scheme in full blast because we upgraded the scheme last year. Especially, because of 5G rollout, we expect the scheme giving full benefits to the industry. The fourth area is to expand R&D and design ecosystem within the country.

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Q. What is the development on the telecom PLI scheme as only three companies claimed incentives in the first year?

A. We have onboarded 42 companies. There are three companies that have qualified and claimed incentives worth Rs 80-90 crore for FY22. We are analysing that and will come up with the actual amount to be reimbursed to them shortly. It will be a good year for PLI especially because of 5G rollout as a lot of upgrades are happening. Both the big manufacturers as well as small vendors will have substantial orders to fulfill. Yes, design-linked PLI is a tough nut to crack because people will have to get designs and then implement them, etc. Therefore, some of it will be time taking, and some of the items that are already under production will take off.

Q. The Budget data suggests that the government has slowed spending on rural connectivity, especially on BharatNet project. What are the reasons for that?

A. BharatNet expenditure under the first project has almost come to a close. The target was to complete 220,000 panchayats. Work in almost 200,000 panchayats is complete. Remaining only 20,000 are left in some 3-4 states and they are in the final stages of completion. So the outlays have actually come down because the approved project is almost complete. Now, we are in maintenance mode. Therefore in the next project sanctioned, the outlays will go up. This year, there will be large outlay for 4G saturation and we might ask for more money. Of the Rs 26,000 crore 4G saturation project, we expect to spend up to 50% this year.

Q. Is the government confident that the spectrum auction will happen this year as operators who bought spectrum in 2022 auctions are yet to be monetise it?

A. We will study the market requirement. When we will send our recommendations to Trai on fresh spectrum auctions, they will also consult the market. The plan is to auction the satellite spectrum, private 5G spectrum, all of them together. Trai is yet to give references on the satellite spectrum.

Q. What is the status on the new Telecom Bill?

A. The draft has been revised. Now, we are doing some informal consultations with internal stakeholders and that exercise will be completed in the next 15 days after which we will decide.

Q. Any major changes expected in the new draft?

A. Fair amount of changes have been made based on the inputs we have received. Some of the inputs are conflicting, some are in consonance. So, let us not get into the context, we will come back once the draft is ready.

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Q. BSNL has not awarded the tender for procuring equipments. What is the reason for that?

A. That’s right. The tender is almost under the stage of finalisation. This is a complicated tender because of the involvement of new technology, etc. So it’s not like a commodity, which we can straight away buy from the market. This is a very special tender. Therefore, people are taking all the precautions to ensure that everything is on board. We are in the final stages of evaluation.

Q. There were reports that government is likely to dismantle Digital Communication Commission (DCC). What are your views?

A. Those were all rumours. At this point in time, there is nothing. DCC is functional.