As the government focuses on boosting local manufacturing, Nokia has said it is confident of continuing its market leadership in the telecom gear space in the country with increased manufacturing and the launch of new products. The Finnish telecom gear maker is bullish on the revamped production-linked incentive (PLI) scheme for telecom and networking equipment and sees itself as a frontrunner in meeting the targets for incentives.
“We have been a participant of telecom PLI 1.0 and then we switched to PLI 2.0 looking at the growth opportunities in India and the rest of the world, especially with 5G. We decided that we needed to increase investment targets, and we have done that. And with that investment target enhancement, we are now looking at increasing our manufacturing footprint both from capacity, as well as adding new products in order to do more,” Amit Marwah, head of marketing and corporate affairs at Nokia India, said.
In February 2021, the government had introduced the PLI scheme for manufacturing of telecom and networking equipment with an outlay of `12,195 crore over a five-year period. The government in June approved 31 companies, including Dixon Technologies, Nokia India, and Foxconn, to manufacture telecom equipment under the scheme. Last year, the government amended the scheme to include design-led manufacturing, added more products, and also gave earlier participants option to switch to the new scheme.
“We met the incentives target for FY22 under PLI 1.0, but since we have now shifted to the revamped scheme, we will not be able to claim that. We shifted to the new PLI scheme because we saw huge opportunities in terms of incentives and we wanted to increase our investments,” Marwah said.
To become eligible for 4% incentives under the telecom PLI, a company other than MSME has to invest a minimum of `100 crore over a period of five years of the scheme and achieve minimum incremental sales three times above the investments.
Earlier this month, Nokia said it will extend the manufacturing of passive optical network (PON) optical line terminals (OLTs), which are used for fibre broadband connectivity, at its factory in Sriperimbudur near Chennai. The company’s decision to extend its manufacturing of the equipment comes in response to an increase in demand in the domestic as well as international markets.
When asked about the loss of market share, especially from the indigenous stack to be used by BSNL for the 4G and 5G rollout, Marwah said, “We welcome competition. We see a lot of opportunities for growth in other ways. The plate is so big, even if we don’t get, let’s say a BSNL business, there are many opportunities in other places that you can look. The company has a much larger and richer portfolio of telecom equipment products.”
India contributes over 5% to Nokia’s yearly revenues. In the October-December period, Nokia witnessed a 129% y-o-y increase in sales at €568 million (about `5,043 crore) from its India business, on the back of the 5G rollout in the country by Bharti Airtel and Reliance Jio. With strong growth in sales, Nokia’s business from India during the October-December grew the highest among all its other markets including North America, Europe, China, Asia Pacific, and others.
For the complete year 2022, Nokia India sales grew 15% in constant currency terms to €1,290 million (about `11,467 crore).
The company has also bagged multi-year contracts from both Jio and Airtel to supply equipment from its AirScale portfolio, including base stations, high-capacity 5G antennas, network software, and remote radio heads, among others, for 5G deployment.
