Opportunities in ESDM Telecom Sector. Sanjay Nayak Co-founder, MD & CEO

Transcription

1 Opportunities in ESDM Telecom Sector Sanjay Nayak Co-founder, MD & CEO 1

2 Outline How big is the opportunity Building Indian telecom equipment industry Role of government policy support Tejas Networks Ltd. 2

3 Global Telecom Equipment Scenario A $290 Bnindustry-one of the top high-tech industry Driven by innovation, system-design expertise and manufacturing Infrastructure equipment (40%) Wireless (driving growth) Wireline(enabling broadband infrastructure) Handsets/CPE (60%) 2G, Smartphones, CPE Dominated by few large players Top-5 players contribute to 70% of the revenues Emerging markets are driving growth APAC (37%), EMEA (28%), North America (30%), Others (5%) Indian demand is around 6-7% of the global Tejas Networks Ltd. 3

4 India Equipment Potential 2,00,000 1,50,000 1,00,000 50,000 - India Telecom Spending & Domestic Production 2,00,000 1,80,000 1,60,000 1,40,000 1,20,000 1,00,000 80,000 60,000 40,000 20,000 - Source: TRAI report Imports vs Exports Domestic Production Through Imports India consumed nearly Rs 54,000 cr of equipment last FY Majority of network infrastructure equipment is imported Telecom equipment import is 2 nd largest item of trade deficit Handset production has ramped up in the last few years Production of >Rs 15,000 Cr; a majority of components are still imported TRAI has set a target to have 80% of demand met by local production by 2020 India can become a large exported of telecom products by 2020 Exports Imports Tejas Networks Proprietary 4

5 India Telecom Equipment demand India Equipment Breakup (2011) Mobile Handsets 68% Wireless 2% Broadband Access 2% Packet Switching 11% Transmission 13% Other 4% 54,000 Crores in ,000 Crores by 2015 Source: TRAI report Mobile Equipment Breakup (2015) 4G/LTE 5% 3G 45% Total 30,000 crores by G 50% 150% growth from2011 to 2015 Wireline Breakup (2015) Broadband 25% Packet Switching 40% Total 18,000 crores by 2015 Transmission 35% 60% growth from 2011 to 2015 Tejas Networks Proprietary 5

6 Telecom Product Value Chain THE BIG IDEA Betting on the right technology and standards Understanding customer needs: features, price points Creation of Intellectual Property R&D & Components R&D : product architecture, design, verification System design: Hardware, Software, Silicon, Mechanicals Optimization for costs, usability 80-90% Value SALES & SUPPORT Developing sales and support infrastructure Building global partnerships and alliances Long-term customer relationships SUPPLY CHAIN & MANUFACTURING Use of contract manufacturers or in-house manufacturing Building and managing a scalable, flexible supply chain Ensuring quality 10-20% Value Tejas Networks Ltd. 6

7 How to build a Rs 250,000 Cr industry by 2020? Focus on building Indian Products - we can be global leaders R&D led innovation to design/develop & manufacture complete systems Adequate talent in hardware, software, standards already exists in India Knowledge-driven: requires much less capital/investments Software and IPR will create differentiators in the long run Will be the driver to make local assembly/manufacturing attractive Build global economies of scale in manufacturing Attract global players to start manufacturing in India A common global scale EMS back-end for all electronics manufacturing Need to build a strong component industry Semiconductor components, PCBs, Mechanicals, Cables/accessories, Crystals etc. Create strong sales push in India as well as internationally Leverage our domestic market to get economies of scale Promote brand India, for telecom products internationally Use of bi-lateral trade to promote exports Tejas Networks Ltd. 7

8 Key Policy support initiatives needed Leverage domestic market demand to create initial market pull Need volume-based and provenness in India, to become globally competitive TRAI has recommended 30-80% use of domestic products from Use of Indian products in projects of national importance will also address national security concerns, in addition to self-reliance Encourage R&D/Innovation to create Indian Products Provide R&D grants and risk-capital to entrepreneurs Influence global standards bodies- push standards that are relevant for India Provide long-term working capital for growth Provide upto 7 year financing at international rates Tax/fiscal concessions to reduce the handicap faced by Indian cos. Indian companies face upto 22% cost disadvantage against other countries Attract global-scale EMS and component industry in India This will benefit the entire ESDM industry Tejas Networks Ltd. 8

9 Thank You 9

10 India Manufacturing Potential Indian Telecom Industry (2011) Total: 80,000 Crores Indian Telecom Industry (2011) (By Manufacturing Source) Exports 18% India Local Demand 82% Indian Production by Indian Companies, 1,600 Imports, 53,222 Indian Production (Foreign Companies), 54,500 Indian Telecom Industry (2015) Total: Crores Indian Telecom Market (2015) (By Manufacturing Source) Exports 32% India Local Demand 68% Production by Indian Companies, 45,281 Imports, 47,145 Indian Production (Foreign Companies), 1,05,657 Tejas Networks Proprietary 10