Report on Telecom Sector Roadmap for Innovation 2010-2020 - Telecom Sector Innovation Council

 
Report on Telecom Sector Roadmap for Innovation 2010-2020 - Telecom Sector Innovation Council
Report
                  on
Telecom Sector Roadmap for Innovation
              2010-2020

  Telecom Sector Innovation Council

                  1
Report on Telecom Sector Roadmap for Innovation 2010-2020 - Telecom Sector Innovation Council
Table of Contents
1.      Executive Summary ................................................................................................................................ 3
2.      Introduction ............................................................................................................................................. 5
     2.1        Overview of Opportunities for Innovations in the Telecom Sector.............................................. 6
     2.2        Need for Innovation in Indian Telecom Sector ............................................................................. 8
3.      Creation of Innovation Ecosystem - Present Status and Recommendations .................................... 10
     3.1        Telecom Service Providers (TSPs) ............................................................................................... 10
     3.2        Telecom Equipment Manufacturers ............................................................................................ 12
     3.3        Academia ....................................................................................................................................... 14
     3.4        R&D Organizations ...................................................................................................................... 17
     3.5        VAS and Applications Development ............................................................................................ 24
     3.6        Government policies and initiatives for telecom sector .............................................................. 25
4.      Telecom Sector’s Roadmap for Innovation, 2010-2020 ....................................................................... 29
     4.1        Innovation ..................................................................................................................................... 29
     4.2        Recommended role of TSIC .......................................................................................................... 29
     4.3        Innovation metrics for telecom sector ......................................................................................... 30
     4.4        Suggested roadmap for Telecom Service Providers domain ...................................................... 31
     4.5        Academia ....................................................................................................................................... 33
     4.6        Telecom R&D Centres / Design houses and VAS developers ..................................................... 33
     4.7        Telecom Equipment Manufacturers ............................................................................................ 35
     4.8        Government policies ..................................................................................................................... 35
5.      Conclusions ............................................................................................................................................ 36
References: ...................................................................................................................................................... 37
Annex 1: DoT Memo on setting up of Telecom Sector Innovation Council (TSIC) .................................... 38
Annex 2             Innovation in China ................................................................................................................. 40
Annex 3 ........................................................................................................................................................... 42
Annex 4 ........................................................................................................................................................... 46
Annex 5 ........................................................................................................................................................... 49
Annex 6 ........................................................................................................................................................... 54
Annex 7 ........................................................................................................................................................... 57
Annex 8 ........................................................................................................................................................... 58
Annex 9 ........................................................................................................................................................... 60
Annex 10 ......................................................................................................................................................... 62
6.      Addendum .............................................................................................................................................. 66

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Telecom Sector Roadmap for Innovation 2010-2020

1.   Executive Summary
     1.   Realizing the centrality of innovation to a country’s economic well being, the
          Government of India has declared 2010-2020 as the “Decade of Innovation’’
          with focus on inclusive growth. Innovation, in today’s globalized economy, is
          recognized as as great, perhaps greater, a contributor to a country’s wealth as
          the natural resources. Accordingly, the Government, in its endeavour to have
          an innovation led inclusive growth, has set up National Innovation Council
          (NInC). Sectoral Innovation Councils (SInCs) have also been mandated to
          bring sectoral focus and devise implementation strategies. Accordingly,
          Department of Telecommunications (DoT) under the Ministry of
          Communications and IT (MOCIT), has constituted a Telecom Sector
          Innovation Council (TSIC). The Telecom sector has proved to be an
          unqualified success of the economic reforms. It has registered a phenomenal
          growth in the recent past. Building on this success, the sector has to address
          greater challenges in the near future - like those of increasing rural
          penetration and proliferating broadband connections, where there is still a lot
          to be done, both in urban as well as rural areas. These challenges will need
          many more innovative products, services and solutions. TSIC has, as per its
          mandate, deliberated on the issue of promotion of innovations in Telecom
          sector and prepared this report.
     2.   This report takes up various domains or subsectors of Telecom and discusses
          their present status, the opportunities for innovation and the ways to
          encourage and facilitate it. In other words, an attempt has been made to
          suggest ways to create an ecosystem for innovation in the sector. Key metrics
          to assess innovation in the sector have also been identified. Finally a Telecom
          Sector Roadmap for Innovation 2010-2020 has been outlined, keeping in view
          the thrust areas of the telecom sector for the present decade.
     3.   The telecom sector has been divided into following domains for the purpose of
          this report,
          i.     Telecom Service Providers (TSPs)
          ii.    Telecom equipment/components’ manufacturers
          iii.   Universities conducting researching in the cutting edge telecom
                 technologies (Academia)
          iv.    Telecom/IT R&D organisations
          v.     Software services/VAS developers
          vi.    Government policies
          Inputs and recommendations received from various stakeholders in the
          domains, combined with research on various aspects of innovation, have been
          included in the report.

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Telecom Sector Roadmap for Innovation 2010-2020

4.   An Innovation Roadmap for the 2010-2020 has been envisioned which focuses
     on the following major thrust areas,
     a.    Improving indigenous telecom manufacturing in the country.
     b.    Strengthening telecom infrastructure which is important, both, from
           security and economic growth points of view.
     c.    Enhancing R&D activities to increase the level of expertise in the
           country. R&D organizations, Industry and Universities, all have been
           included.
     d.    Developing national telecom standards relevant to Indian conditions
           and to work towards their incorporation in the International standards
           by participating in the deliberations and activities of the
           standardization bodies.
     e.    Influencing Govt. policies in e-governance / e-empowerment services.
     f.    Assisting in formulation of government policies to support the
           ubiquitous adoption of advanced information technologies and the
           broader digital transformation of the society and the economy.
5.   The major recommendations that emerge from this report are
     a.    Continuation and Reconstitution of TSIC and providing fiscal support
           to TSIC for promotion of innovation in the telecom sector.
     b.    Providing market access to Indian telecom products /services in Indian
           telecom networks.
     c.    Setting up of a Telecom Research Development Fund (TRDF) for
           financing of development projects and creation of an enabling
           environment for telecom R&D.
     d.    Mapping of all innovation initiatives by TSIC.
     e.    Implementation      of       TRAI    Recommendations          on     Telecom
           Manufacturing.
     f.    Creation of Telecom Standards Development Organization (TSDO).
     g.    Encouragement to Telecom Technology incubation centres at IITs, IISc,
           IIMs & NITs
     h.    Extending support for innovation related activities to all stakeholders
           in the sector.
     i.    Supporting innovative green and energy efficient technologies /
           solutions in the sector.

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Telecom Sector Roadmap for Innovation 2010-2020

2.   Introduction
     The Government of India has declared 2010-2020 as the “Decade of Innovation’’
     with focus on inclusive growth. To help implement national strategy and prepare a
     roadmap for the decade 2010-20, a mesh of National Innovation Council (NInC),
     State Innovation Councils (SInC) and Sectoral Innovation Councils has been formed
     under the overall guidance of Shri Sam Pitroda, Adviser to the PM on Public
     Information Infrastructure and Innovations (PIII). NInC, thus became the first
     initiative in creating a crosscutting system which will provide mutually reinforcing
     policies, recommendations and methodologies to implement and boost innovation
     performance in the country. In order to drive innovative strategies and enhance
     innovative capabilities in key sectors and create multiple roadmaps, the NInC took
     the initiative to create multiple Sectoral Innovation Councils aligned to various
     Ministries of the Union Government. Accordingly, the Department of
     Telecommunications (DoT) constituted a Telecom Sector Innovation Council (TSIC)
     to deliberate on various aspects of innovation in telecom sector and submit a report.
     The composition of the TSIC is as follows:-
     Shri V V R Sastry, Executive Director, C-DOT                   Chairman
     Shri N K Shrivastava, (then) Sr DDG, TEC                       Member
     Representative from FICCI                                      Member
     Representative from CII                                        Member
     Representative from COAI                                       Member
     Representative from AUSPI                                      Member
     Representative from TCOE                                       Member
     (Maximum 3 in number)
     Representative from TEMA                                       Member
     Representative from Assocham                                   Member
     The chairman later co-opted Mr. B S Chauhan, GM(Sys), C-DOT as member–
     secretary to this council.
     The terms of reference of the council are:
     a)    Map opportunities for innovation in Telecom sector
     b)    Help create innovation eco-system
     c)    Encourage young talent and local universities, colleges, industries, R&D
           institutes
     d)    Identify and reward talent in innovation and disseminate success stories
     e)    Organize seminars, lectures, workshops on innovation
     f)    Provide support to promote innovation in Telecom sector
     g)    Encourage innovations in public service delivery
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Telecom Sector Roadmap for Innovation 2010-2020

      h)     Prepare a Telecom Sector Roadmap for Innovation 2010-2020
      The formation of the TSIC and its Terms of References were notified vide a DoT
      communication no. 8-6/2010 – TCO dated 4th April 2011 (Copy at Annex 1).
      TSIC convened its first meeting on 26th April 2011 at C-DOT Delhi. The meeting
      was attended by the representatives of all the member organisations. During the
      meeting, the background for formation of TSIC, its intended role and its short term
      tasks were presented to the members and the needed actions in this direction were
      deliberated. The minutes were released on 3rd May 2011 and, as decided in the
      meeting, a document requesting inputs from the members for the roadmap
      document was mailed to all on 10th May 2011. The inputs from TEMA, TEC, AUSPI,
      CII, COAI and TCOE were received at different times (M/s Assocham forwarded the
      inputs of its members TEMA and AUSPI, which were also received directly). The
      second meeting of the council was held on 21st July 2011 in TEC Committee Room,
      Delhi where the members’ inputs and the roadmap were deliberated upon. Broad
      consensus was arrived at on preparation of the roadmap after exchange of many
      inputs through emails and electronic interactions. After summarizing all these
      inputs, this report has been prepared.

2.1   Overview of Opportunities for Innovations in the Telecom Sector
      Innovation is a process of taking new ideas to the market. It is the conversion of
      new knowledge into new products, processes and services. Innovation, as a process,
      starts with the invention of a new element/idea, goes through practical development
      of this new element/idea and culminates in its commercialization. Innovation
      encompasses a number of processes related to new products, the search, discovery,
      experimentation, development, imitation and adoption of new products, new
      production processes and new organizational setups. Innovation can be incremental,
      modular, architectural and radical as depicted in the table below,
                                              Effects on links between components
                                              Yes                    No
       Effects on components Yes              Radical                Modular
                             No               Architectural          Incremental

                         Table 2.1: Categorization of Innovations
      The three major technological innovations that have taken place in the Electronics,
      Telecommunications & IT are:
      i.     Innovations in digitalization, computerization, and miniaturization
      ii.    Innovations in the Internet, Mobile communications, Packet based Next
             Generation Networks (NGN) leading to convergence of services.
      iii.   Innovations related to ICT as a generic technology to redesign and rationalize
             production, administration and transaction processes and to create new
             processes and products to create the information society.

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Telecom Sector Roadmap for Innovation 2010-2020

       The successful innovations in digitalization, computerization and TDM switching in
       nineties could be attributed to the indigenization of the technologies which not only
       kept the prices of telecom imports low, as there was always a competing Indian
       product, but also gave the self-confidence to Indian R&D and manufacturing segments
                                                 to forge ahead with a confidence that comes
                                                 from the nation’s ability to complete the
    Excerpts from an article by Dr B D
                                                 development of a complex piece of hardware
    Pradhan, Executive Director, C-DOT from
    1990-95.
                                                 and software through its own efforts. This was
                                                 well proved by C-DOT Switching products.
    “ The C-DOT RAX continues to be seen as      Korea also experienced similar surge in
    C-DOT’s major success. It has become national confidence and capabilities following
    renowned the world over for its versatility
                                                 indigenous development of switch TDX-11.
    and ruggedness. ... The early successes of
    the RAX in the country prompted us to Unlike Korea, however, the success of C-DOT
    explore the markets abroad. One of the       in developing TDM switches did not result in a
    first countries we explored was China.
                                                 sustained growth of indigenous telecom
    The CMD of TCIL and I actually carried a
    64-port version of the RAX to Beijing and    manufacturing industry. The indigenous R&D
    Shanghai. While the Chinese showed a and manufacturing languished. Most of the
    great deal of interest, we realized that remarkable growth in tele-density in the
    they would resist its import from India.
                                                 country has been achieved with the help of
    While there, we also visited the local
    telecom factories. The factories we saw      imported technology and products.
    were primitive compared to our ITI. In
                                                 India’s highly successful IT sector has, through
    some factories, workers were idle and
    waiting for components to arrive from        its services, helped others to develop
    Europe for completing the assembly of        innovative products and systems. However, the
    their equipment. That the Chinese have sector’s product ownership                  and the
    been able to develop their Telecom penetration of IT, with its attendant efficiency
    Industry and Infrastructure from that        benefits, in country’s own enterprises and
    level of primitiveness to world class levels governance remains sub-optimal. Clearly, ICT
    today, is to be admired. It is difficult to innovations are needed to create generic
    avoid a sense of disappointment that,        technology to redesign and rationalize
    despite our much advanced state of           production, administration, and transaction
    development at that time, we were unable processes and to create new processes and
    to move quickly ahead during the last 15
                                                 products to transform the society as a whole to
    years and leapfrog in the development,
    manufacturing and deployment of telecom an information society.
    equipment in the way the Chinese did.”

1   References:          Switch    is   on:   Korea,   A    paper          on     TDX      project
http://cnr.kaist.ac.kr/lecture/ee526_2006/hw/Switch_is_on.pdf
Yang      Seung-taik:     Digital   Divide     &    Cyber      Korea   21     Initiative
(http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan006161.pdf

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Telecom Sector Roadmap for Innovation 2010-2020

2.2   Need for Innovation in Indian Telecom Sector
      Telecom has been one bright spot in India’s growth story of last two decades. This
      sector has performed admirably in registering outstanding growth rates
      consistently to achieve a tele-density which is over 74% now. The tariffs are the
      lowest in the world. The multiplier effect of the vastly expanded and improved
      telecommunication services has been visible and has contributed handsomely to the
      GDP growth of the country. Much as these achievements look impressive, they have
      been attained primarily with the help of
      imported technology and products. During An engineer working on CCS7
      2009-10,     the     indigenous      telecom signalling in C-DOT was invited to
      manufacturing       industry     contributed ETRI, Seoul, Korea in 1992 under
      marginally, just 12-13%, to the telecom UNDP programme. The Koreans were
      operators’ requirements of networking working on Intelligent Networks (IN).
      equipment / solutions or consumers’ The engineers there had Korean
      requirements of terminal equipment. The translations of ITU documents relevant
      net outflow of capital on account of to their work. One thing that struck
      telecom imports is staggering at USD 12 him was the large number of a Protocol
                                                      tester. Almost every work bench
      Billion in 2009-10, second only to
                                                      working on an IN protocol had one
      country’s oil import bill. It is projected to Protocol tester to itself. In C-DOT,
      grow to USD 21 Billion in 2015 and USD there was only one such tester as it was
      37 Billion by 2020. It is predicted that if expensive, above US$ 100,000. It
      the same situation continues, the telecom brought home one major difference
      imports bill will soon overtake oil imports. between ETRI and C-DOT. They were
      The lack of indigenous manufacturing in willing to back their teams and invest to
      this sector also means that the country is have timely rollouts.
      deprived of a great number of jobs. Job
      creation is important to ensure that a higher percentage of population moves to
      manufacturing or service sector from agriculture for greater overall prosperity of
      the society. The manufacturing sector creates jobs for all levels of skills; from
      unskilled, semi-skilled to highly skilled experts.
      In state support for innovations, we have the example of other economies like
      China, Taiwan and Korea in the fast growing Asian region before us. China in
      particular, has placed the full force of the state behind the indigenous innovation.
      They coined words like co-innovation and re-innovation to lay claims on the
      technology developed in the west. The lure of a huge market was used to invite
      transnational companies into the parlour and part with their technology2.
      Another reason for greater advocacy of indigenous capabilities and manufacturing
      is from the angle of country’s security. Telecom is a strategic infrastructure. The
      physical and financial security of the country relies ever more heavily on its telecom

      2 James McGregor, Senior Counselor, APCO Worldwide: China’s drive for
      Indigenous Innovation - A web of Industrial Policies.

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Telecom Sector Roadmap for Innovation 2010-2020

infrastructure these days. Adversaries can inflict huge damages on country’s
security, economy and social fabric by disrupting its network, destroy or tamper
with databases and steal sensitive information. Indigenous technologies and
manufacturing are important not only to keep the malware and other security
vulnerabilities out but also to develop our knowledge base and expertise to help us
in security testing and certification of telecom equipment.

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Telecom Sector Roadmap for Innovation 2010-2020

3.    Creation of Innovation             Ecosystem        -    Present       Status       and
      Recommendations
      To address the need for indigenous telecom innovation, the old paradigm of import
      substitution will not work in the new liberalized and globalized scenario. The
      Indian telecom products need to have a “strong dose of innovation” to create
      differentiations in performance, price, features and adaptation to Indian conditions.
      To create such an innovation eco-system we need to study the present status of
      various sub-sectors (domains) of telecom sector and arrive at specific
      recommendations for each of these domains.
      The telecom sector in the country can be sub-divided into following six domains:

      1.    Service Providers (TSPs, ISPs, MNSPs, etc.)
      2.    Telecom Equipment Manufacturers
      3.    Academia & universities
      4.    Telecom/IT R&D organisations
      5.    Software services/VAS developers
      6.    Government policies
      Status of these domains, innovation opportunities and recommendations given by
      the major players are summarized in the following part of the document.

3.1   Telecom Service Providers (TSPs)
      Telecom operators in the country have played a commendable role in expanding the
      network to its present level where it is world’s second largest network. The tariffs
      are the lowest in the world, making telecom a truly affordable service. The

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Telecom Sector Roadmap for Innovation 2010-2020

challenge continues, as the next 400 million subscribers will come from rural areas
where the tele-density is still poor compared to the urban areas. The ARPUs will be
still lower while a poor infrastructure will add to the capex and opex pressures. This
certainly calls for innovations to register growth amidst such challenges. Operators
have been good practitioners of innovation to reach the present level of network
coverage, servicing a large clients’ base in different geographies with different
cultures, use pattern and challenges of infrastructure and operations. Most of the
innovations are internal and gives them competitive advantage over others and
hence not readily shared with the industry as best practices. The good performance
of the Telecom Operators indicates that the managements must be doing enough to
motivate and reward innovations to retain their business edge. The responses to
the questionnaire from two major telecom operators associations in the country,
namely AUSPI and COAI are enclosed. (Annex 3 and 4)
While telecom operators are supportive of their own innovations, they are wary of
using the results of R&D and manufacturing sectors’ innovations. Operators want
well proven products which will give trouble free service. This is not only important
from customer satisfaction and operational revenues point of view but is also
mandated by the regulator TRAI which stipulates penalties for deficiency or
discontinuity of services. The indigenously developed and manufactured equipment,
in all likelihood, follow an evolutionary path where experience derived from field
deployment is used to improve the product and services. In fact field trial and initial
deployments are almost a part of the development process. For this reason, many
countries have, at some point of time, reserved part of their telecom markets and
spectrum for the home companies.
The operators oppose imposition of mandatory quotas for indigenously developed
/manufactured products in their network. They are willing to adopt Indian products
if they are of equivalent quality and prices as the imported ones. There are several
compelling commercial reasons for telecom operators to prefer imported network
equipment. The transnational corporations are able to offer very attractive
financing terms, of deferred payments, very low rates of interest, revenue sharing
model or a combination of some or all of these. Often, the equipment manufacturer
is an equity participant of the operator and has a say in the procurement decisions.
Then, MNS (Managed Network Services) are increasingly being used by the
operators. Highly vertically integrated companied like Ericsson, Huawei etc. have
cornered a large share of MNS business. This leaves little scope for Indian products
companies who do not have the scale and product range of these companies.
Nevertheless, the TSPs are using indigenously innovated and developed VAS
products, mostly from SMEs, where it makes good business sense to them. It shows
that the TSPs are not averse to using indigenous products so long as they are able
to measure up to foreign technology products in price and performance.
As of now Indian TSPs are not very keen on having R&D of their own unlike their
large MNC counterparts like Vodafone. As Indian TSPs grow further in size and
diversify their operations, which is already happening with Africa and Sri Lanka
forays of Airtel, they will see value in R&D, whether of their own or in collaboration
with R&D organizations, innovations and IP for better value creation.
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Telecom Sector Roadmap for Innovation 2010-2020

      Recommendations of Telecom Service providers to encourage innovation:
      a.    Following service areas should be focussed for innovations:
                  Application areas special to rural sector
                  Security network and areas related to it with reference to service
                   sector etc.
                  Content development specific to Indian conditions and environment
                  Increased data centre and user solution network, platform by
                   Government for public.
                  Tele-education products, tuitions, tests
      b.    Should create sectoral Entrepreneurship Development Centres.
      c.    Should have generous public funding.
      d.    Thrust on IPR generation in the initial 3-5 years.
      e.    Tax burdens should be reduced by Government leaving sufficient margin to
            the operators to invest in innovations.
      f.    Need to create SDO (Standards Development Organisation) to globalise
            innovations.

3.2   Telecom Equipment Manufacturers
      Today, market access is the major hurdle for A Time magazine article on the
      telecom manufacturing companies to become cost breakup of a US$ 500+
      significant contributors to national economy. Some iPhone gives following figures;
      of the telecom manufacturing companies have Components                   $       174,
      their in-house R&D setups. In that sense, they are     Manufacturing  $ 6, Remaining
                                                             $ 321 on sales, distribution
      both creators and consumers of intellectual
                                                             expenses (say $ 100), IPR and
      property. The SMEs, in particular, rely heavily on profit ($ 221). IPR cost is really
      incremental and radical innovations of their own R&D and design expenditure
      to come out with new products / solutions. amortised                over    product’s
      However, the problems of market access acts as a lifetime, higher initially and
      big dampener to their efforts and motivation to do lowered progressively to reduce
      R&D, product development and innovate. There the price when competing
      have been several cases where indigenously products appear in the market.
      developed products, with Indian IP, have been
      kept out by commercial conditions of the tenders that favour imports. There have
      been cases where products developed in the country by Indian companies have
      fallen prey to predatory pricing by foreign companies, who often get all support from
      their governments.
      The telecom manufacturing industry in the country had been quite vibrant in the
      nineties. It is pertinent to quote C-DOT’s example to illustrate that a lot can be
      achieved with Government’s support for indigenous development and access to the
      market as was evident in the case of C-DOT’s indigenously developed digital
      switching technology. There was political will to support the indigenous technology
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Telecom Sector Roadmap for Innovation 2010-2020

developed for local conditions. ITI’s 3rd Switching factory was established solely to
manufacture C-DOT developed switches for the expansion and digitalization of the
telephony network.
In post liberalization period, C-DOT continued to work on telecom projects but faced
problems of market access. Some private sector players also invested in R&D to
come out with innovative products. Barring a few successes, they have also faced
problems of market access.
The state of innovation in telecom manufacturing sub-sector and the challenges
faced by them are given in the form of responses to a questionnaire by a council
member, TEMA (Telecom Equipment Manufacturers Association) placed at annex 5.
Feedback received from CII (Confederation of Indian Industries) is at annex 6.
Recommendations of Telecom equipment Manufacturers:
1.    Should setup a Central Coordinating organization within Govt of India,
      which should be responsible for
      i      Development of roadmap of technology in India for next three to five
             years.
      ii     All the indigenisation programmes
      iii    Manage the disbursement of Funds to support budding Indian
             companies.
      iv     Implementation of policies of Govt on preferential access and Market
             Pull to ensure that Companies in India buy Indian Products.
      v      Ensuring that Indian companies get a working capital at very
             competitive interest rates which are available worldwide (around 2%)
      vi     Ensuring that all Strategic Govt projects are based on Indian Products
             and companies are informed in advance to develop products suiting to
             those requirements.
      vii    Ensuring Globalisation of Indian Products and Technologies
      viii   Providing significantly larger amount (100% of reimbursement) for
             filing and maintaining patents in India, as well as globally. The
             current limit on such support from the government is very low and the
             procedure is very cumbersome (An article from ‘The Economist’ on
             patenting in China at Annex 2).
2.    It is felt that TRAI recommendations of April 2011 on Telecom Manufacturing
      address the issue very comprehensively. All the relevant issues have been
      discussed at length in the report. The report discusses and makes
      recommendations on,
      a.     Low contribution of DMP (Domestically Manufactured Products,
             further divided into Indian Products, IP, and India Manufactured
             Product, IMP) in the expansion of telecom network in the country.
      b.     Fiscal disadvantages faced by DMP.
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Telecom Sector Roadmap for Innovation 2010-2020

                c.    The problems of market access.
                d.    The highly disadvantaged state of components’ industry where imports
                      of finished goods attract no custom duties but components and raw
                      material thereof attract custom and excise duties as well as central
                      and state sales taxes.
        3.      The TRAI recommendations can be accessed at TRAI site3
        It is highly desirable to implement the recommendations to revitalize the telecom
        manufacturing sector and to bring in innovations in the sector.

3.3     Academia
        Academia has great dual responsibility of capacity building and leading R&D. It is
        from these national technical and management institutes that the needed
        innovators, researchers, entrepreneurs, managers and business leaders emerge. In
        developed world, graduate students and research scholars form the bedrock of R&D
        community and there is also a healthy industry – academia interface.
        Academia is best suited to play a leading role in innovation and generation of IP.
        For disruptive innovation, we must nurture universities and technical institutes.
        Innovation is often multi-disciplinary. Thus a healthy, vibrant university
        atmosphere where students / researchers working in different areas interact in
        many formal and informal settings can be a fertile ground for innovative ideas and
        technologies. We need a national mission to push at least 5 of our universities to be
        in the global top 100 positions by 2020.
        It is heartening that our universities are recognising the importance of innovation.
        Delhi University has, as recently as in September 2011, announced a B.Tech.
        (Innovation with Mathematics and IT) course with options to specialize in Genetics
        and Molecular Biology or Management and Economics or Electronics.

3.3.1        Incubation Centres in academic institutes
             Academia based research can produce path breaking technologies, concepts,
             techniques and standards but it requires the passion and energy of
             entrepreneurs to convert the Intellectual capital into products for the
             marketplace. We need incubation centres in the campuses to groom such
             entrepreneurs. Incubation is a very effective way of converting Intellectual
             capital generated through academic research into businesses. Incubators provide
             the institutional mechanism through which support from government, industry
             and universities can be channelled to nurture start-ups. Entrepreneurs draw on
             the ecosystem provided by incubators to develop and test the feasibility of their

3http://www.trai.gov.in/WriteReadData/trai/upload/Recommendations/133/Recommondation%20_telecom.pdf

(corrigendum at
        http://www.trai.gov.in/writereaddata/trai/upload/recommendations/134/corrigendum.pdf)

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Telecom Sector Roadmap for Innovation 2010-2020

business model and find financial and managerial resources. Incubators can aid
success by offering other complementary resources, such as IPR protection, legal
advice and domain specific databases.
Almost all IITs and IIMs have their own incubation centres (list at Annex 7). A
paper on “Creating a supportive ecosystem for incubating rural telecom ventures
in          India”                   can         be          viewed          at
http://www.iitcoe.in/index.php?option=com_docman&task=doc_download&gid=17
6&Itemid=20
The response received from IITB is placed at Annex 8. The response from TCOE,
on behalf of academia is placed at Annex 9.
Recommendations for incubation:
1. Innovation and entrepreneurship do not exist in a vacuum. An ecosystem
    consisting of various institutions, networks, processes, designed to support
    product creation, adoption and ensuring financial viability is important.
2. Innovation ecosystem should be designed to capture the local scientific,
    academic and research base effectively.
3. As creation of test and measurement facilities and test beds is very capex
    intensive, such infrastructure or access to it should be arranged by the
    incubation centre.
4. Such initiatives require a long lead time and therefore, assessment criteria
    should be designed accordingly.
5. Incubators need to design market mechanisms to allocate subsidies
    effectively.
6. Incubators should develop linkages with overseas entrepreneurs and
    investors early.
7. Management processes in an incubator need to be designed to cater to the life
    cycle of an innovation.
8. The role of Technology Transfer Office (TTO) is very important for nurturing
    and bringing an innovation to commercialization. Therefore, it is important to
    upgrade the capabilities of TTO, staff them appropriately and provide
    appropriate incentives.
9. Nurturing and commercializing such initiatives requires considerable time,
    effort, resources and interventions. Early part of the incubator cycle may
    require frequent process and resource iteration.
10. Institution based incubatees should have option of MBA (Entrepreneurship)
    as a safety net.
11. Greater flexibility should be shown to promising incubatees in funding (angel
    funding up to, say Rs 5 crore), and time allowed at the incubation centre (say
    up to 5 years). There have been several instances of technopreneurs having to
    sell out to MNCs because of inadequate funding and / or early eviction when

                                 15
Telecom Sector Roadmap for Innovation 2010-2020

             continued funding and / or a couple of years of support could have bailed them
             out.
         12. There should be a national level award / recognition scheme for best
             innovation based telecom technology enterprise. The jury should include some
             renowned experts from foreign academia, who can be contacted through the
             good offices of IIT/IIM professors, to bring international expertise to the table.

3.3.2 Other programmes for fostering Innovation
         There are a few ongoing programmes, which, with varying degrees of success,
         are trying to promote innovation in the country. All are broad based and not
         devoted to telecom alone. Some examples are given below,
         i.     In order to attract the young students to science and technology,
                Department of Science and Technology (DST) has instituted “Innovation of
                Science Pursuit for Inspire Research (INSPIRE)” programme which
                awards scholarships to deserving students who show an aptitude for
                research and development at school level.
         ii.    DST also has a Kishore Vaigyanik Protsahan Yojana (KVPY) for college
                going young students. This programme is for all disciplines, including
                telecom.
         iii.   DST has many schemes and fellowships for scientists and engineers to
                help them in their research endeavours. Some examples are TDPP
                (Technology development and demonstration programme), TePP
                (Technopreneur Promotion Programme) and Technology Development
                Board (TDB). There are also STEP (Software Technology
                Entrepreneurship Parks) and TBI (Technology Business Incubators) to
                help incubations.
         iv.    DIT (Department of Information Technology) runs an incubation and
                entrepreneurship development programme called TIDE (Technology
                Incubation and Development of Entrepreneurs).
         v.     DST Lockheed Martin India Innovation Growth Programme run by
                FICCI, jointly with Indo US S&T Forum and IC2 Institute, University of
                Texas, Austin, has been running since 2007 and has spawned some 77
                successful commercial enterprises till date. It holds a competition where
                innovative ideas are evaluated by experts and selected for awards. The
                innovators are trained in taking the idea through various stages of
                commercialization. Interactions with venture capitalists, prospective
                buyers of technology / innovation and industry are also facilitated.
         vi.    India Innovation Initiative – i3 Programme is run jointly by CII, DST and
                Agilent technologies to encourage, recognize and support innovators in the
                age group of 18 years onwards. The potential innovators are provided
                mentoring and incubation support.
         vii.   Bharti Airtel and Reliance had announced setting up of sizable innovation

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Telecom Sector Roadmap for Innovation 2010-2020

                 funds. However, there have been media reports that the Bharti Airtel fund
                 has been closed for want of suitable projects.
         Recommendations for academic institutions to encourage innovation:
         i.      Should have a national mission to push at least 5 of our technical
                 universities in top 100 worldwide by 2020.
         ii.     A substantial increase in M.Tech and Ph.D scholarships / fellowships to
                 bring them near par with the Industry compensation in order to attract
                 students to a career in R&D.
         iii.    Should have greater emphasis on Research and Intellectual property
                 generation in technical education institutes. IP generation / patenting
                 should be given more importance compared to contribution to technical
                 publications.
         iv.     Should actively participate in national and international seminars,
                 meetings.
         v.      Should run collaborative programmes with academic institutes and R&D
                 organisations. Students of such courses should be employed directly by the
                 sponsoring organization.
         vi.     Should promote collaborations with premier foreign universities /
                 technical institutes in the developed world so that the students get
                 international exposure and are able to imbibe the work culture prevalent
                 there.
         vii.    Incubations centres should help and mentor budding entrepreneurs.
         viii.   Should provide greater autonomy to professors in taking up research
                 projects and utilization of project funds.
         ix.     Should initiate compulsory courses on IPR and patenting.
         x.      R&D organizations and academic institutes should be funded and
                 encouraged to become members of forums like ITU, 3GPP, IETF, SDR
                 Forum, IETF, WWRF etc. to play an important role in development of
                 technologies and their standardization,.
         xi.     Should institute innovation awards to help innovators / entrepreneurs in
                 getting recognition for their work and also much needed visibility to
                 attract VC funding, technology purchase offers or industry collaborations.
         xii.    R&D organizations should work closely with the academia and encourage
                 employees to acquire higher educational qualifications while working on
                 their official projects (e.g. M.Tech / Ph.D. by research).

3.4   R&D Organizations
      The R&D efforts in telecom in the country are sub-optimal. There are only a few
      organizations, listed below, engaged in telecom R&D.

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Telecom Sector Roadmap for Innovation 2010-2020

3.4.1   Centre for Development of Telematics (C-DOT)
        The Centre for Development of Telematics (C-DOT) is the Telecom Technology
        development centre of the Government of India. It was established in August
        1984 as an autonomous body. It was vested with full freedom and total flexibility
        to develop state-of-the-art telecommunication technology to meet the needs of
        the Indian telecommunication network. The key objective was to build a centre
        for excellence in the area of telecom technology. C-DOT has evolved, from a
        single mission oriented organization to an R&D centre, working on several
        important, cutting edge technologies. C-DOT provides solutions for current and
        future requirements of telecommunications including projects of national
        importance for rural applications, strategic sector and law enforcement / security
        agencies.

3.4.2   Plant based R&D of manufacturing companies e.g. ITI, HTL etc.
        R&D division of ITI has many successes to its credit. They did some excellent
        work in transmission equipment (PDH systems, channel banks, microwave links
        etc.). A plant based R&D is often bogged down with solving manufacturing or
        field problems and may not be able to retain constant focus on product
        development. Plus, the hardware culture of the organization might have
        prevented them from developing good software development skills and
        methodologies.

3.4.3   R&D in private sector
        There are a few private companies who have good in-house R&D infrastructure.
        M/s Tejas is cited as an example of a private sector company competing globally
        on the strength of the products developed by its own R&D. M/s VNL and M/s
        Coral Telecom are few other examples. These companies have concentrated on
        owning / generating Intellectual property. The private companies adopt a flexible
        approach of acquiring partial hardware and software applications from abroad
        and adding Indian design and IP to achieve a true Indian product and faster
        market reach.

3.4.4   Sporadic efforts of other R&D organizations
        Other R&D organizations like C-DAC, BARC etc. have made forays into telecom
        product development. They were more of sporadic attempts instead of concerted
        efforts at technology development and its productionization. IIT-M has been an
        exception as it has spawned product companies and CeWIT continues to make
        significant contributions to IPR generation.

3.4.5   Standardization
        Standards play a very important part in telecom hence there is a need to set up
        a Telecom Standards Development Organization (TSDO) in Public Private
        Partnership (PPP) mode to make national standards and get Indian
        requirements and IP incorporated into International standards. The size of the

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Telecom Sector Roadmap for Innovation 2010-2020

        Indian market commands respect of the international vendors. By getting
        foreign vendors to design their products and services to meet India specific
        requirements (e.g. support for Indian languages), it can be ensured that Indian
        IPs get into their products and Indian innovators and developers can get the
        benefit.
        The inputs from Telecom Engineering Centre (TEC) are placed at Annex 10.

3.4.6   Innovation in R&D, product standards & IPR segment:
        Department of Telecommunications (DoT) constituted a subgroup under
        chairmanship of Prof. Ashok Jhunjhunwala to check out recommendations on
        manufacturing, R&D, product standards & IPR for the 12th Five Year Plan. This
        subgroup conducted extensive interactions and brought out the following
        recommendations on R&D, standards & IPR which are highly relevant to this
        report.
        Recommendations on innovation in R&D, product standards & IPR segment:
        a.    Promote companies / institutions to develop capabilities in Technology
              forecasting for Indian requirements. In this direction, DOT should set up
              a council, with Member (Technology) as its chairman, consisting of
              technical experts as members from Telecom Service Providers, Public and
              Private Telecom Manufacturing Industry, Government, Academia and
              R&D institutions. They will function as permanent team of experts, and
              work on a collaborative and contribution driven professional model. They
              will map Technology and Product development forecasts for this sector.
              They will evolve and provide periodic updates of the national five year
              rolling program of technology/product development and its field
              absorption. They will become the nodal group to monitor and ensure the
              implementations of various recommendations made for promoting Indian
              Products, manufacturing and IPR.
        b.    Fund Telecom R&D towards IPR generation and Product Development
              and Commercialization
                   DOT should create Telecom Research Development Fund (TRDF) of
                    Rs. 5000 Crores in 12th Five Year Plan.
                       TRDF should be managed by a council, consisting of two
                        Government representatives including Secretary DoT, who will
                        chair the council, 2 professionals from telecom operations
                        industry, 2 professionals from Telecom Equipment Companies, 4
                        telecom Scientists/faculty from leading Indian institutes, 1
                        person with financial/VC background. The council should have a
                        small secretariat.
                       TRDF to fund research with clear focus towards tangible
                        patents/IPRs, which would go into international standards and
                        for development of high end products for future telecom systems
                        and services. Incremental research innovations will not be
                                       19
Telecom Sector Roadmap for Innovation 2010-2020

                            supported through this fund, as other funding sources from
                            science and technology ministries are available for this. Blue sky
                            research may sometime be funded, however, when there is a
                            clear road-map to convert such research towards next
                            generation standards, culminating into commercial products,
                            and it appears that it is critical to move fast in an integrated
                            manner from basic research to product development.
                           TRDF to fund technology/product development, for which there
                            is current/future market by Private and Government companies
                            and R&D institutions as grants and soft loans.
                           TRDF to fund Academic research with grants for futuristic
                            technology development with emphasis on IPR Creation.
                           Preference will be given to fund projects involving industry –
                            academia consortium.
                           TRDF will fund Indian participation in international standards
                            bodies, up to 75% of fees for filing and maintaining patents.
           Broad telecom areas for R&D funding as envisaged presently are as follows
                                Telecom technology areas for R & D funding

Broad Area     Segment which        is   Products that can be developed   Core technologies involved
               addressed

Wireless       Wireless Broadband        HSPA+                            Smart Antennas
               Access / Backhaul
                                         4G/5G systems                    Cognitive radios
                                         IBS/DAS systems                  Software Defined Radios
                                         Pico cells/Femto cells based     Advanced DSP
                                         products
                                                                          Coding &Modulation techniques
                                         Multiprotocol low range
                                                                          mm-Wave wireless systems
                                         compact base stations
                                                                          Switching/packet processing
                                         IP/Hybrid microwave radios
                                         E Band Radios in 60/70/80GHz
                                         for 1/10Gbps links

               Active                    Shared small size GSM Radio      Sharing of BSS (BSC, BTS,
               Infrastructure            Access Network                   TRAU and OMCR)
               sharing

                                                   20
Telecom Sector Roadmap for Innovation 2010-2020

                             Telecom technology areas for R & D funding

Broad Area   Segment which       is   Products that can be developed   Core technologies involved
             addressed

             Wireless Network         Software tools for wireless      Wireless RF propagation models
             Planning                 network planning and             for Indian terrain (keeping in
                                      optimization                     mind high density, vegetation &
                                                                       spectrum allocated)
                                      Software tools for Wireless
                                      service assurance and network    Algorithms for KPIs keeping in
                                      performance                      mind Indian regulatory
                                      monitoring/reporting             requirements
                                                                       Spectrum efficiency
                                                                       optimization

Optical      Broadband Access         10G/40G PON systems              Burst Mode optical transmitters
                                                                       and receivers at 10G/40G
                                      WDM-PON systems
                                                                       Injection locked optical sources
                                      Hybrid WDM-TDM-PON
                                      systems                          Broadband light sources
                                      Carrier Ethernet                 Cyclic AWGs
                                                                       Switching/packet processing

             Backbone networks        Ultra dense WDM systems          Raman amplifiers
                                      All optical network platform     Coherent optical
                                                                       transmitters/receivers
                                      ASON software platform for
                                      ROADM                            Integrated optical devices like
                                                                       switches
                                                                       All optical wavelength
                                                                       convertors

             Metro/Aggregation        Next-Gen SDH with packet         IP cores for packet & OTN
             network                  transport & OTN compliant        compliant interfaces leading to
                                      interfaces Packet Optical        FPGAs, ASICs, TDM and IP
                                      Transport Platform               switching, Mappers, Framers
                                                                       etc.

IP           Ethernet                 PBT based on PBB-TE and          IP Switching, Cores leading to
             transport/aggregatio     MPLS-TP                          ASICs, protocols, algorithms
             n – carrier grade                                         and software stacks
                                      SIP application servers and
                                      soft-switches
                                      Session border controllers

                                      Terabit routers

             Multi service            MSPP with MEN/xDSL/XPON          IP Cores leading to ASICs,
             platform                 interfaces with Gbps backhaul    protocols, algorithms and
                                      supported by MPLS-TP profile     software stacks

                                                21
Telecom Sector Roadmap for Innovation 2010-2020

                               Telecom technology areas for R & D funding

Broad Area      Segment which       is   Products that can be developed     Core technologies involved
                addressed

Telecom         Network Security         Lawful intercept monitoring        Algorithm for interception of
Security                                 systems supporting                 connection oriented networks,
                                         voice/video/data services          Algorithms for interception of
                                                                            VoIP , Video over IP,
                                         Location based monitoring
                                         systems                            GPS based monitoring systems
                                         Secure IP communication            Encryption technologies
                                         devices and equipments,
                                         Hardware-based Encryptors

                Common criterion         NE level security conformance      Telecom Product testing &
                certification lab        testing from cyber attacks         infrastructure building
                                         Application level security
                                         conformance testing from cyber
                                         attacks

Telecom         Converged Network        Service Provisioning and           Mediation support for both
Services &      Management               Management System                  legacy and standard based NEs
Applications    System
                                         Decentralized Mediation            Core architecture to support
                                         Systems                            Multi-vendor, multi technology,
                                                                            multi-browser, multiple
                                                                            platforms

                Virtual data centres                                        Virtualization and cloud
                                                                            computing

                Account settling for     Data Clearing House                TAP procedures
                TSPs

                Service Delivery         North and South band interfaces to TSPs NOC to support OSS &
                Platforms for            BSS
                supporting
                                         Future proof solution supporting education, entertainment,
                multiple                 enterprise applications for delivery over wireless infrastructure to
                applications and         the smart-phones/tablets/ embedded laptop devices
                VAS

Public safety   Bio engineering          Base stations with less than
                studies on EMF           1W emissions
                radiation impact
                                         Handsets with few microwatt
                                         SAR

                                                   22
Telecom Sector Roadmap for Innovation 2010-2020

                                   Telecom technology areas for R & D funding

Broad Area          Segment which      is   Products that can be developed   Core technologies involved
                    addressed

Mobile hand-        3G/4G handsets          Indian OS to replace Android,    Algorithms for conversion to
held devices                                Symbian                          vernacular languages
                    CPEs
and CPEs
                                            Low power consuming rugged       Charging with Embedded solar
                                            handsets with innovative         cells, low power electronics etc.
                                            charging stations
                                                                             SoC, DSP algorithms
                                            Smart phone, tablets & other
                                            handheld devices
                                            Mobile VAS
                                            Customer Premises Equipment
                                            for broadband

Telecom             Network powering        Solar Hybrid power solution      Reliable, efficient and cost
related                                     systems                          effective solar cells
electronics

Note: TEMA, a TSIC member, has suggested inclusion of following products / technologies
in the above list:
               i.          Broadband systems based on evolving WiFi standards.
               ii.         Mobile data offload to WiFi network
               iii.        Shared small size MSC, GSM RAN (sharing of active infrastructure)
               iv.         Innovative wireless products and systems based on global standards
                           for India specific conditions.

          c.          Strengthen public R&D institutions like C-DOT. Encourage and enable
                      them to collaborate with public as well as private industry and with
                      academia for technology development
                          Allow projects where an Industry (public or private) could retain
                           exclusive technology rights for initial three years provided they are
                           jointly funding development along with the R&D institution. The R&D
                           institution could in return get royalty.
          d.          Enable Creation of IPRs and push into Standards
                          Create Telecom Standards Development Organization (TSDO) led by
                           industry and telecom service providers and with academia, R&D
                           centres and government participation
                                  Drive IPR creation and global standards to meet India-specific
                                  requirements
                                 DOT will vet the final standards before promoting them in ITU

                                                     23
Telecom Sector Roadmap for Innovation 2010-2020

                          as international standards and decide on adopting them as
                          national standards.
                  Reorient Academic R&D and R&D centres towards IPR generation for
                   telecom standards, leading to development and commercialization of
                   Indian Products. This IPR should be both essential IPR that goes into
                   international standards, as well as implementational IPR that goes
                   into products. Funding support should also be given for the researchers
                   to attend standards meetings regularly so that their IPR can be
                   promoted for inclusion in the standards. These meetings take place
                   seven to eight times a year all over the world. As India becomes active,
                   such meetings should take place regularly in India as well.
                         Augment TCOEs for this purpose
                         Support as many R&D centres as possible, both in public, PPP
                          and private spheres. Continued support should depend on track
                          record of quality of output, IPRs successfully incorporated in
                          standards or products, ability to launch work in emerging areas.
         e.    Strengthen TEC to coordinate setting up labs for testing and certification
               of products as per international best practices.
                  Create some private and Public-private bodies to set up accredited test
                   to test products for conformance, performance, inter-operability and
                   security.
                         Desirable to set up such labs in vicinity of strong R&D clusters
                          and academia to assist in development process. A lot of the test
                          equipment, particularly software, for emerging technologies are
                          also developed in parallel with products. These tend to be very
                          expensive in the initial years, acting as a roadblock for
                          entrepreneurs and industry. Involving academia in close
                          proximity is a very cost-effective way to bring the cost of tester
                          development down, and leverage the ability of academia to
                          quickly understand new concepts.
                  Fund Creation of live test-beds for next generation technologies,
                   particularly by consortia of industry and academia. Such test beds
                   should be widely available for industry and entrepreneurs for assisting
                   them in fine-tuning their products.
                  Reserve certain spectrum for R&D and field trials (pilots).
                  Reserve certain spectrum where only indigenously developed products
                   can be deployed.

3.5   VAS and Applications Development
      The great diversity of India, with multiple languages, dialects, professions, customs,
      traditions and diverse educational attainments make it a virtually limitless market
      for VAS and application software developers. While developed countries expect a

                                          24
Telecom Sector Roadmap for Innovation 2010-2020

      certain level of school education for all citizens, it cannot be taken for granted in
      India where literacy is still a problem. As an illustration, an information website
      application for rice growers, has to be not only multi lingual to cater to different
      regions but also need to have a version for illiterate and neo-literate users with
      greater graphical and audio based navigation and content delivery.
      The national broadband rollout plan which aims to provide broadband access to
      250,000 village panchayats, can bring in e-education, e-governance, e-banking, tele-
      medicine services at rural doorsteps. This has the potential of not only opening the
      flood gates of innovation opportunities for Indian products and technologies but also
      lot of business/innovation opportunities to VAS developers.
      Recommendations to encourage innovation in VAS:
      a.    Government departments should accelerate their e-governance / e-services
            programmes and make public the requirements.
      b.    TRDF should encourage and assist the developers / technopreneurs.
      c.    TRDF should commission projects on easy to use development and content
            management tools to enable content development in Indian languages for
            rural communities by moderately trained persons. This will empower rural
            communities to develop their own contents and present it in ways that they
            understand best.

3.6   Government policies and initiatives for telecom sector
      As per the Constitution of India, telecommunications is a central subject. The
      erstwhile Department of Post & Telegraph gave way to the formation of two
      separate departments, viz. Department of Post & Department of
      Telecommunications under the Ministry of Communications. Department of
      Electronics had been established in the Ministry of Electronics, which was later
      renamed as the Ministry of Information Technology just before the new millennium.
      However within a few years thereafter, both these ministries were merged to form
      the Ministry of Communications & IT with 3 departments, viz. Telecommunications,
      Information Technology & Posts.
      The telecom services have been recognized the world-over as an important tool for
      socio-economic development of a nation. Indian telecommunication sector has
      undergone a major process of transformation through significant policy reforms,
      beginning, in particular, with the announcement of NTP 1994 and subsequently re-
      emphasized and carried forward under NTP 1999, and now NTP 2011. Driven by
      various policy initiatives, the Indian telecom sector has witnessed a complete
      transformation in the last two decades. It has achieved a phenomenal growth
      during the last few years and is poised to take a big leap in the future too.
      The entry of private service providers brought with it the inevitable need for an
      independent regulator and thus the Telecom Regulatory Authority of India (TRAI)
      was established. Another major step was to set up the Universal Service Obligation
      Fund (USOF). The Telecom Centres of Excellence (TCOE) were set up in Public
      Private Partnership (PPP) mode and are an example of the Government, the
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