24, జూన్ 2011, శుక్రవారం

On Some Issues Related To Telecom Sector


Telecom equipment revenue in 2010-11 in India
As per the survey on 500 telecom equipment manufacturing companies in India , the revenue of the telecom equipment industry for the year 2010-11 was Rs 1,17,039 crores. In this, the carrier equipment revenue was Rs 58249 crores,  the enterprise equipment revenue was Rs 24023 crores, the user device (mobile handset, fixed phone instrument, data cards, modems, tablets etc) revenue was Rs 34722 crores.
As per the report of the consultancy firm PWC (Price Water Coopers) the value added in India in telecom equipment manufacture is 11% only and the remaining 89% is for importing components. Thus in this Rs 1,17,039 crores earned by the telecom equipment industry, only Rs 12874 is the value added in India and the remaining Rs 104165 crores is for importing the components.(Source-The Economic Times dated 24-6-2011)
CBI issued reminder to TRAI for quantifying the loss in 2G spectrum scam
As per the estimate of the CBI the Government lost Rs 22000 crores in the 2G spectrum scam. As per the estimate of the CAG(Comptroller and Auditor-General), the loss was Rs 1,76,000 crores. CBI requested TRAI to set up an expert committee to find out the exact loss, which can be proven in the Court. Since there is no response even after six months, the CBI issued a reminder to TRAI(Source-The Economic Times dated 24-6-2011)
Government invites EOI for semiconductor fabs
“Semiconductor device fabrication is the process used to create the integrated circuits that are present in everyday electrical and electronic devices. It is a multiple-step sequence of photographic and chemical processing steps during which electronic circuits are gradually created on a wafer made of pure semiconducting material. Silicon is almost always used, but various compound semiconductors are used for specialized applications.
The entire manufacturing process, from start to packaged chips ready for shipment, takes six to eight weeks and is performed in highly specialized facilities referred to as fabs” 
Semiconductor devices are essential components in several telecom equipments and electronic equipments. For sophisticated telecom equipments, the semiconductor component is up to 60%. The demand for semiconductor devices in India will be 50 billion dollars by 2020( Rs 2 lakh crores).
But there is no semiconductor manufacturing facility(fab) in India. India designs a large number of chips for other countries, but not manufacturing the chips based on its own designs. Other countries use these designs to do semiconductor business of billions of dollars. At present only 10% of the requirement of semiconductors is serviced by Indian manufacture and 90% imported.
The TRAI recommended to set up a cutting edge technology fab facility with government funding upto 75% in which upto 49% should be equity and the remaining as loan.  It further recommended to set up a second fab unit for manufacture of general purpose chips that could be used   in a large number of equipment, with Government funding up to  50% in which upto 49% should be Government equity and the remaining Government debt. Thus as per TRAI the Government should be there as a minority partner.
As per the estimates of the Department of IT, the cost of a high technology semiconductor fabrication unit (fab) is Rs 15000 crore and that of a general purpose semiconductor fab is about Rs 10,000 crore.  In the conference held by the Minister Kapil Sibal on 5-5-2011 the ITI proposed that as a Government Company the ITI should be revitalised by the Government and hence the Government should make ITI again as the manufacturing hub for the telecom equipment and as the for manufacturing the semiconductors(fab).
But the Government is not agreeing for the request of ITI.  As per the report in The Hindu Business Line dated 24-6-2011 the Government is not even in favour of equity participation in the Fab units. Instead, it is proposing a new package of “Special Incentive Package Scheme” (SIPS) although the earlier SIPS announced in 2007 failed to get any response. Now the Government  has announced a new SIPS with more incentives to the Foreign and Indian Capitalists willing to enter the fab manufacture field in India.  (Sources: Wikipedia, TRAI and DoT  websites and The Hindu Business Line dated 24-6-2011)

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