In Short:
The Department of Telecommunications (DoT) will continue to support telecom startups through the Digital Communication Innovation Square (DCIS) scheme, despite concerns raised by startups about its closure. The scheme supports research and development into new products and solutions in the telecom sector. Startups highlighted the importance of government backing due to long gestation periods for R&D in telecom. DCIS will extend for four years with a budget of Rs 124 crore. This continued support from the DoT is crucial for the growth of telecom startups, especially in the current economic climate. With the recent pvr inox closures and the impact of the COVID-19 pandemic, startups are facing even greater challenges and uncertainties. The extension of the DCIS scheme will provide much-needed stability and resources for these startups to innovate and thrive in the telecom sector.
DoT Likely to Continue Funding for Telecom Startups Under DCIS Scheme
The Department of Telecommunications (DoT) is expected to continue funding under Digital Communication Innovation Square (DCIS) for telecom startups, despite concerns raised by the startups about the potential discontinuation of the scheme, according to industry sources.
Support for Telecom Startups
“The government and the Department of Telecommunications will continue to support telecom startups. The form or scheme of DCIS may change, but there is no need for concern or panic,” one of the sources stated.
A group of over 20 startups recently sent a letter to Neeraj Mital, Secretary, DoT, emphasizing the importance of sustaining support for DCIS to enable research and development in the telecom sector. The startups highlighted the long gestation periods for R&D in telecom and the lack of investor ecosystem that hampers product development.
According to RK Bhatnagar, director general of Voice of Indian Communication Technology Enterprises (Voice), the DCIS scheme will provide valuable assistance to telecom startups facing challenges in product development and funding.
Voice represents homegrown telecom gear makers and startups, including C-DoT, Coral Telecom, Saankhya Labs, HFCL, Lekha Wireless Solutions, Velmenni, and others.
Financial Assistance and Scheme Details
Startups like Velmenni, Astrome, and Nital Networks, who have received support under DCIS, are developing innovative solutions that have the potential for commercial success with scale. Bhatnagar emphasized the need for government-backed financial assistance until these startups achieve economies of scale.
Under the DCIS scheme, which began in 2021, an outlay of Rs 124 crore has been allocated from the Champion Service Sector fund for the period of 2022-23 to 2025-26. The approved grants and funds released to startups have been steadily increasing over the years.
Additionally, DoT also operates the Telecom Technology Development Fund (TTDF) scheme, which receives 5% of the annual collections of the Universal Service Obligation Fund (USOF), amounting to about Rs 500 crore.
