STL says studying PLI scheme to assess benefit to expansion plans

Data network solutions provider Sterlite Technologies is studying the fineprint of recently-announced PLI scheme for telecom to assess extent of benefits that may accrue to it on future expansion plans, particularly for its portfolio of 4G/5G wireless radio access equipment, its Group CEO said.

Overall, the 4-6 per cent incentives offered under the PLI (production-linked incentive) scheme are “attractive” as these give companies additional impetus to invest more, and faster. The timing too “works well” for the company which has already carved out aggressive expansion plans, Sterlite Technologies (STL) Group CEO Anand Agarwal told PTI.

“It aligns well with the creation of 5G ecosystem. We are working on radio ecosystem, specifically the wireless ecosystem based on Open RAN (Open Radio Access Networks) shift…we are developing both hardware and software. I am sure with this scheme coming in, there will be some benefits that start accruing,” Agarwal said.

STL is studying the modalities including value addition thresholds, investments required, mode of disbursal, and the company, in the next few months, expects to be able to make full assessment of business benefits arising from the scheme, that is “directionally very positive”.

With its portfolio spanning optical fibre and cables, network design and deployment as well as network software, Pune-based STL positions itself as an integrated solutions provider for global data networks, with optical preform, fibre and cable manufacturing facilities in India, Italy, China and Brazil.

While the company”s expansion on fibre and cable side is not eligible under the new PLI scheme, which largely focuses on offsetting huge import of telecom equipment with ”Made in India” products both for domestic markets and exports, STL said its 5G portfolio is eligible for benefits.

“Wireless radio equipment will be a big element, which is the part we have already starting developing. We have done couple of product launches in December last year, and we will start having those revenues coming in largely from Q4 FY22. So, on those products, we are eligible for benefits,” Agarwal said.

The company has already taken decision to proceed on wireless products, and evaluation now is in terms of applicability of the new scheme and its benefits on the overall business plans.

“How much of that scheme is applicable, and how much benefit accrues to us, is something we will calculate,” he said.

Last week, the government unveiled a mega production-linked incentive scheme for telecom gear manufacturing in India, which is expected to encourage production of equipment worth Rs 2.44 lakh crore and create direct and indirect employment for about 40,000 people.

The Rs 12,195 crore PLI scheme for telecom equipment manufacturing will be operational from April 1, 2021.

The scheme aims to make India a global hub of manufacturing of telecom equipment including core transmission equipment, 4G/5G next-generation radio access network and wireless equipment, access and Customer Premises Equipment (CPE), Internet of Things (IoT) access devices, other wireless equipment and enterprise equipment like switches and routers.

It is expected that scheme will bring investment of more than Rs 3,000 crore and generate huge direct and indirect employment and taxes both.

The scheme is expected to offset the huge imports of telecom equipment worth more than Rs 50,000 crores and reinforce it with “Made in India” products.

In doing so, the PLI follows on the footsteps of a successful incentive scheme for mobile production, that has drawn large manufacturers and device makers to India. In fact, Communications Minister Ravi Shankar Prasad has said that the government will soon come up with PLI scheme to encourage production of laptops, ipad and tablet PCs. PTI