DoT to continue DCIS scheme for startups in ‘one form or other’, ET Telecom

NEW DELHI: The Department of Telecommunications (DoT) is likely to continue funding under Digital Communication Innovation Square (DCIS) even as telecom startups have raised concerns about the foreclosure of the scheme, according to industry sources.

“The government and the Department of Telecommunications will continue to support the telecom startups. But the form or scheme (DCIS) may change. There is no cause for concern or panic,” one of the sources told ETTelecom on the condition of anonymity.

This comes close on the heels of over 20 startups’ letter to Neeraj Mital, Secretary, DoT, highlighting that DCIS has built momentum in the last two years, and urged that the government should sustain its support for worthwhile results considering the research and development (R&D) in telecom sector has long gestation periods.

“Due to the high gestation period of telecom R&D and lack of investor ecosystem, many telecom companies doing great work either wrap up or start focussing on services as an alternative funding option, but then the product focus is lost. DoT’s DCIS scheme will be immensely beneficial to such startups,” RK Bhatnagar, director general, Voice of Indian Communication Technology Enterprises (Voice), said in the letter.

ETTelecom has reviewed a copy of the letter dated May 1, 2024.

Voice represents homegrown telecom gear makers and startups including the Centre for Development of Telematics (C-DoT), Coral Telecom, Saankhya Labs, HFCL, Lekha Wireless Solutions, and Velmenni, and others.

“The initial struggle of startups can be attributed to low-to-negligible adoption rates. But DCIS awardees like Velmenni, Astrome, Nital Networks, and others, are developing world-class solutions. They will be able to achieve commercial success with economies of scale. Until then, we need government-backed financial assistance,” Bhatnagar told ETTelecom separately.

As per the scheme document, the duration of DCIS will extend for four years, from 2022-23 to 2025-26, with an outlay of Rs 124 crore from the budgetary support under the Champion Service Sector fund.

As per the DCIS website, the approved grant was Rs 47 crore in FY24 and Rs 19 crore funds were released to startups. In FY23, the approved grant stood at Rs 51.5 crore, while Rs 36.2 crore funds were released. In FY22, Rs 6.6 crore grants were provided to startup beneficiaries.

DoT also has the Telecom Technology Development Fund (TTDF) scheme which is currently 5% of the annual collections of the Universal Service Obligation Fund (USOF), or about Rs 500 crore.