DoT’s plan to stop DCIS leaves telecom sector startups in a jittery

Final call on the scheme will be taken in next couple of months, as Govt is mulling alternative plan to lend support to startups from telecom technology development fund (TTDF)

telecom sector startups

New Delhi: The Central government’s plan to discontinue Digital Communication Innovation Square (DCIS) scheme midway has left a number of startups in the telecom sector in a jittery.

Under the DCIS scheme, the department of telecommunications (DoT) supports the startups doing research, development, product design, and intellectual property (IP) creation in the telecom sector.

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Peeved at the DoT’s plan to stop the scheme, around two dozen startups have written a letter to the telecom secretary Neeraj Mittal and urged him to continue the scheme, as financing is essential for them to owing to prolong R&D journey. The startups claimed that their projects are facing lack of interest from investors. They claim that though a majority of the startups is not self sustaining, they are collaborating on promising solutions for difficult projects.

Some of the startups have also pointed out procedural delays in receiving the grants. “We have not even received 20-40% of the grants under the scheme despite reaching the relevant milestones,” said one of the startup founders. It is learnt that DoT is considering a closure and not released pending grants as a few startups have turned profitable.

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“Review of our projects have been done in December last year. However, we are still waiting for a tranche release for the last six months. Policy/management change should not lead to redoing the review completely from the beginning,” said one of the founders, pleading anonymity.

Some of the promising startups claimed that they have been able to develop proof of concepts of their solutions, conducted quality research to better their solutions, and in fact many have generated their own IPs in the telecom solutions from the grants received through the scheme in the last three years.

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“We request that the scheme must not discontinue midway, as product development activities of more than 50 companies will be hampered and the companies will feel disheartened and discouraged from working on government-led R&D schemes in future,” said Rakesh Bhatnagar, director general, Voice of Indian Communication Technology Enterprises (VoICE).

When contacted, a senior officer of the DoT said that the government will take a decision on continuance of the scheme after discussions. “The plan is to accommodate more companies and already there is a telecom technology development fund (TTDF) in place to support the startups,” he said.

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The Central government had launched DCIS, the first R&D financing scheme for telecom startups, in 2021 and it was meant to continue for five years. The scheme had 66 startup beneficiaries, which included domestic telecom solutions providers such as Astrome, Lekha Wireless, Coral Telecom, Amantya Technologies, Signaltron, Resonous, among others, in the last financial year ended March.

Under the scheme, the government was offering a funding of up to ₹50 lakhs for startups and ₹2 crore for micro, small and medium enterprises, which could go up to ₹10 crore on the basis of the project. The DoT has made a budgetary outlay of ₹124 crore to run the DCIS and and Telecom Centres of Excellence (TCOE) India is the implementing agency.

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As per the DCIS website, the DoT has approved grant was ₹47 crore, and released funds ₹19 crore in the FY 2024. In FY23, the approved grant was ₹51.5 crore and funds released were ₹36.2 crore. In FY 22, the government provided ₹6.6 crore worth grants to the startup beneficiaries under the scheme.

One of the startup founders said that the DCIS was the first initiative of DoT that enabled a product innovation ecosystem in the country. “We hope that DCIS would continue to accelerate Product startups in the country,” he said.

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