Broadband India Forum (BIF) organized a summit titled ‘Mobile Telephony in India – Towards a Sustainable Innovation Economy’ in New Delhi. The event was graced by Shri N. Sivasailam, Special Secretary, Telecom. Shri S.K. Gupta, Secretary Telecom Regulatory Authority of India (TRAI) and Dr. A.K. Garg, Scientist, Ministry of Electronics and Information Technology (MeitY) were also present among the Special Guests of Honour. The summit which saw the release of the Report and was attended by leading industry experts and other notable members of the domestic mobile handset ecosystem in India.
Mobile telephony in the contemporary structure of the world order consists of the wheels on which an economy continues to run and accelerate. It is the backbone of the digital infrastructure—connecting and binding people in the country and beyond its borders. The importance of mobile telephony in the Government’s economic growth plans and in creating social equity can be underscored by recent policy initiatives such as Make in India that has laid a strong emphasis on mobile manufacturing in the country. NITI Aayog points out that OEMs or ODMs or component/accessories suppliers are still in infancy in India and most of it is confined to last mile assembly. The study looks at the key factors that will provide greater push to the Make in India initiative in this sector. Towards this, the report analyses the economic and social potential of the mobile manufacturing sector and assesses its preparedness to support Make in India.
Commenting on the report, Shri T.V. Ramachandran, President, Broadband India Forum said, “India’s domestic mobile handset manufacturers remain largely reliant upon the innovations and standards set up by the international players and organisations. By stepping up its innovative framework the Indian mobile industry will be better placed to contribute to the global standardization process. This will also determine its role in the upcoming 5G ecosystem that promises to be truly transformational and one that the government intends to deeply integrate with the flagship Make-In-India programme.”
Shri Kaushik Dutta, Founding Co-Director TARI said, “The Government of India’s National IPR Policy 2016 is focused not only on Indians recognizing their own IPs but also respecting third-party IPs. But prior to establishing an innovations framework and in contributing to the global standardisation process, India needs to have a business-ready ecosystem that also recognizes the IPs of international patent holders. For the continued use and benefits from new technologies such as 5G, it is imperative that royalty payments are proportionate to investments to enable both patent rights holders and manufacturers thrive in this growing ecosystem.”
The findings of the report highlight three significant issues affecting India’s indigenous mobile telephony and other telecommunications equipment sector growth and therefore also affecting Make-in-India.
The first issue is that mobile telephony growth in the country is today largely being driven and is dependent upon imports. The share of mobile and other telecommunications equipment in the country’s total import basket is continually increasing and currently stands at 26.4%. The share of Chinese products in this basket is continually rising and its share has increased from 64.3% in 2012-13 to 69.4% in 2016-17.
The second issue is that manufacturing value added (MVA) by Indian manufacturers is relatively small mainly due to high dependence on imported components. Considering increase in mobile penetration from current levels and large dependency on imports, the role of mobile and telecommunications equipment is crucial under the Government of India’s Make in India initiative.
The third issue is that mobile technology innovators, who are also the Standard-Essential Patent (SEP) owners, have often held the view that they do not make sufficient economic gains for their investments in research and development (R&D). On the contrary, mobile manufacturers state that the royalty claims on use of licensed technologies is too high. The study estimated the royalty yield by analysing the IPR revenues (earnings from IPRs in their annual report/filings) of 10 global companies, which includes major mobile technology innovators and licensors as a percentage of the mobile sales in the global settings.