Jio, Airtel in talks with Samsung to locally manufacture telecom gear

In a change in stance, Samsung has conveyed to the telecom department about its intention to apply for the next edition of the production-linked incentive (PLI) 2.0 scheme for network equipment to locally manufacture 4G and 5G products. The Korean telecom gear maker is in talks with Reliance Jio and Bharti Airtel for 4G expansion and 5G supply contracts, people familiar with the matter said.

“Samsung has made its stance clear to the DoT in recent meetings. During its discussions, Samsung has shared a letter with the government that says it will be interested in the phase 2 of the PLI scheme,” a person familiar with the matter said.

Samsung had in mid-2021 decided not to take part in the initial PLI scheme for network equipment, reasoning that setting up a plant for network equipment was not viable at that time in India with just one client, Reliance Jio Infocomm. The Korean major had then told officials in the Department of Telecommunications (DoT) that its plants in Vietnam, South Korea and China have sufficient capacity for global demand, including to meet demand for Jio’s 4G network. Samsung has been importing the equipment duty-free through the free trade agreement (FTA) route from South Korea and Vietnam.

But since then, Samsung has been talking to Jio as well as the likes of Bharti Airtel for 4G and 5G equipment supply contracts. Airtel has been looking at options to diversify its vendor base beyond European gear makers Nokia and Ericsson.

Jio, on its part, is currently trailing its own end-to-end 5G stack across the country. But people familiar with the matter said that Jio may award business to Samsung for its 5G network given that the latter was the sole provider of 4G gear for the Mukesh Ambani-owned carrier. Samsung is currently conducting 5G field trials with Jio.

Jio president Mathew Oommen had said that the carrier was open to adopting “third party technology”, other than its own technology, for its 5G networks.

Besides meeting local telecom equipment demand initially, Samsung is also evaluating the possibility of exporting 4G and 5G gear from India. “The demand mapping will be done once there is a confirmation on PLI 2.0,” the person said.

Samsung is one of the key players to be leveraging the Indian government’s PLI scheme for mobile phones. It was the only company to have achieved investment and output targets under the scheme in the last fiscal year.

The company has a large factory in Uttar Pradesh, which was inaugurated by Prime Minister Narendra Modi in 2018. Samsung had then committed Rs 4,915 crore ($673.29 million) investment for the factory.

It recently relocated its mobile and IT display production unit from China to Uttar Pradesh and is investing Rs 4,825 crore ($660.96 million) for the same. TelecomTalk