GSM service providers' lobby group COAI today opposed telecom regulator Trai's recommendations mandating the use of made-in-India equipment in networks.

It appreciated some parts of the recommendations like providing fiscal incentives for promoting domestic manufacturing, but opposed the mandatory use of those product by telecom operators.

"Mandating the use of Domestically Manufactured Products (DMP) is contrary to the NTP (National Telecom Policy) which provides for technology neutrality, flexibility of choice and openness to provide the best of telecom services using state- of-the-art equipment," said Rajan S Mathews, Director General, Cellular Operators Association of India (COAI) in a statement.

"Such mandatory requirements may also put service providers at risk of not meeting quality of service requirements mandated by Trai, equipment obsolescence and open the networks to other security risks if such products are not of world class quality," Mathews added.

According to Trai, only 12-13 per cent of all the locally made products, built with the aid of foreign vendors in 2009-10, were used in the sector. However, purely India-made products formed just three per cent of the total market.

Trai has categorised domestically manufactured products in two parts -- Indian Manufactured Products (IMP) and Indian Products (IP).

The Authority defined IMPs as those products, in which intellectual property rights (IPRs) reside outside the country and Indian Products, which have IPRs here.

Trai has recommended that the share of IMPs should gradually go up by 15, 20, 25 and 30 per cent in the financial years 2012-13, 2014-15, 2016-17 and 2019-20 respectively. For IP, it has given slabs of 15, 25, 35 and 50 per cent in the same set of years as in the case of IMPs.

COAI said the government should implement these recommendations for state-run telecom companies namely BSNL and MTNL.

"If the government believes that mandatory quotas are a proper policy initiative, then COAI strongly recommends that this be applied to the PSUs (MTNL, BSNL) where government has a significant ownership interest and leave the private service providers to follow market forces," Mathews said.

Meanwhile, the Department of Telecom's internal committee, under Additional Secretary (Telecom), is studying Trai recommendations for preparing a Telecom Equipment Manufacturing Policy.