TRAI recommends Telecom Research fund, Telecom research park and Telecom Manufacturing fund

After an exhaustive process of consultations, TRAI finalised its recommendations on need and measures to support Indian Telecom Manufacturers. Highlights:

• TRAI recommended preferential market access in public procurement from Indian  Manufactured Products and Indian products (Indian IP). For the year 2012-13 preferred access is targeted at 45% ( 30% for Indian manufactured products with min value addition of 25% and 10% for Indian Products) and this is binding on public sector units, MTNL, BSNL etc but also on Government Licensees. Well all service providers are licensees- will private players accept the recommendation?  If service providers do not meet the stipulated minimum, they need to deposit amount equal to 5% of short fall with either Telecom Research Fund or Telecom Manufacturing Fund. And if they exceed the minimum, they get refund from license fee in proportionate manner- if they exceed 20% i.e they procure 50% from India, then they get rebate of 20% on license fee for that year.
• All equipment manufacturers (less than 1000 crore turnover ) should get interest subsidy of 3% for Indian Manufactured product and 6% for Indian product. Another incentive is to defer taxes (excise/ sales tax etc) for a period of 5 years with nominal rate of interest and income tax holiday for 10 years.
•  TEC to be made an autonomous organization of international reputation for product testing and certification. Once certified , the tender condition of `provenness' to be waived off for 10% of tendered requirement.
• Telecom clusters to be identified and developed. Manufacturing units in the cluster to be provided subsidy at 4.5%
• Telecom Research Park to be set up with 1000 acres of land and 5000 crores of investment, 1000 incubating start-ups, by 2013. The work should begin by May 2011.
• Telecom Research and Development fund with a corpus of 10,000 crores. At 8%, the corpus would make available Rs 800 crores to support about 40 innovations every year.
• Government to provide 3000 crores to Telecom Manufacturing Fund and rest from other bodies.

Download report(241 pages): TRAI