Samsung likely to apply for PLI scheme to make for 4G, 5G gear locally for Jio, global telcos

Samsung Electronics is likely to apply for the Rs 12,195-crore production-linked incentive scheme in a bid to start domestic production of 4G and 5G gear along with other equipment for local and export purposes.

The South Korean electronics major expects to supply telecom gear to its only telco customer in India so far – Reliance Jio – besides global clients, from its factory which is expected to come up Uttar Pradesh, a company official told ET. This would mean that Samsung could join other global manufacturers like Cisco Jabil, Flex and Foxconn, besides European telecom equipment vendors Nokia and Ericsson in applying for the scheme of the Indian government aimed at boosting local production of telecom equipment and reducing imports.

“Samsung is looking to have diversified manufacturing given that it has recently won 5G business globally. Jio though is its most critical and largest client globally,” the official said.

The Korean company’s exclusive tie-up with Reliance Jio on 4G has already ended and the Mukesh Ambani-led telco has stressed its intentions of building everything related to 5G in India.

“They (Samsung) want to support Jio’s network from a local manufacturing unit since there is a push for make in India,” a senior Jio executive added.

Jio, on its part, is still discussing manufacturing partnerships for its own 5G equipment in the country and is expected to give orders to manufacturers with “tier-1” facilities in the country.

“Jio’s own design will be given to mass manufacturers. The talks are at an advanced level since the deployment will be done quickly after the 5G spectrum auction later this year,” the Jio executive said. “Jio will not procure anything from outside. Everything will be made in India.”

Queries sent to Samsung and Jio didn’t elicit any response.

Bank of America Merrill Lynch, in a recent report, said that Jio may depend on its 4G gear partner Samsung so that its 5G equipment is backward compatible. “If Samsung starts. assembling/manufacturing 5G massive MIMO/RU in India, then Jio’s entire 5G stack in theory would be ‘Made in India’,” said the report.

Equipment makers, including Samsung, are awaiting the final guidelines of the PLI scheme, which will specify how many global and local companies would be selected. The scheme for telecom equipment will offer incentives to the selected companies for incremental production over the base year. It would be operational from April 1 and the government expects it to lead to incremental production of around Rs 2.4 lakh crore with exports of around Rs 1.95 lakh crore over five years.

The scheme will cover core and 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, routers etc.