Telecom manufacturing is growing in India despite global economic melt down. This is mainly due to a strong domestic demand. The industry achieved a growth of over 70% in telecom manufacturing in 2007-08. The industry as done well on export front even though the Telecom Equipment Manufactures Association (TEMA) did not release the figures. In an interview with TelecomTiger, the newly elected President of TEMA Bharat Bhatia talks about the status of telecom manufacturing in India.

Excerpts:

Q1: What is the impact of global economic slowdown on domestic equipment manufacturing?

A: We are expecting a slow down in growth in telecom equipment manufacturing. This year the growth is expected to be only 27-30% compared to 71% growth registered during last financial year. This is certainly due to economic slowdown. However, one should not forget that out base has also increased in last two years.

Q2: What are the production figures during last year?

A: Production of telecom equipment is estimated to go up to Rs 51,800 crore during the current financial year compared to Rs 41,270 Crore in 2007-08.

Q3: Is there any impact on job cuts?

A: No, I do not think there would be any impact on job cuts in India. We have got information that some companies would hire large number of employees. This is due to the reason that foreign companies find it more cost effective to develop some of the products in India, especially embedded software.

Q4: What are the segments in equipment manufacturing which have not done well?

A: We are not doing well at all in the fixed line service segment. This is mainly due to reduced demand in the segment. The wireline equipment production has gone down from Rs 13,100 cr to Rs 11,780 cr and is further expected to fall down to Rs 9,450 cr this fiscal year.

Demand of cables is also reducing. Only the silver lining is the production of optical fiber cables which increased from Rs 446 cr in 2006-07 to Rs 534 cr in 2007-08 and is further expected to increase to Rs. 609 cr in 2008-09.

Q5: So the growth comes mainly from the wireless manufacturing sector.

A: Yes, it is true. Wireless equipment manufacturing including cellular mobile phones has registered the highest growth where the production has gone up from Rs 10,545 cr in 2006-07 to Rs. 28,600 cr, recording a 171% growth. However this year the expected production from the wireless equipment market including cellular phones is estimated to be Rs 41,650 cr, with a growth rate of 46%.