Excluding Chinese enterprises from participating in 5g construction? Is India willing to spend more money?

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 Excluding Chinese enterprises from participating in 5g construction? Is India willing to spend more money?


Author: Qian Xiaoyan, editor in chief: Feng Difan

Chen said it was too early to conclude that India would exclude Chinese equipment from 5g. It will be difficult for India to accept an increase of more than 35% over Chinas equipment.

Recently, there have been constant reports in Indian media that Chinese enterprises may be excluded from the 5g layout of India.

In an exclusive interview with cnbc-tv18, Chinese ambassador to India, sun Weidong, said to the host that India had decided not to invite Chinese companies to participate in the 5g test, he said, I dont know what the basis of your statement is. It is understood that last year, the Indian Telecommunications Administration invited enterprises from various countries, including Huawei, to participate in the 5g network test in India.

In an interview with first finance and economics reporter, Chen Jing, a researcher at the society for science, technology and strategic wind and cloud, said that it would be premature to conclude that India would exclude Chinese equipment from 5g. He said that India is often very sensitive on price issues, and it is difficult for India to completely turn to European Telecom suppliers in the long run and accept an increase of more than 35% over Chinese equipment.

Excluding China?

Sun Weidong said, Huawei has never had any security problems in its operations in India, and has offered to sign a backdoor free agreement with India. It is hoped that India can make an independent and fair judgment and provide an open, fair, transparent and non discriminatory business environment for Chinese enterprises to invest and operate.

India revised its foreign investment rules on July 23, which stipulates that neighboring enterprises wishing to participate in the bidding of government contracts need to register in advance and accept security investigation. The decision was made to strengthen Indias national defense and national security, the government said in a statement.

Indias land-based neighbors include China, Pakistan, Bangladesh, Myanmar, Nepal and Bhutan. Considering the investment layout of these countries in India, this change means that China has a serious tendency.

After that, Bharti Airtel, Indias second-largest mobile operator, plans to exclude Huawei and ZTE in the next 5g trial and use European suppliers instead.

Huawei and ZTE have been suppliers of Bati Telecom for a long time, and Huawei equipment accounts for more than one third of Bati Telecoms existing network. Bati Telecom has already reduced its dependence on Chinese companies such as Huawei, replacing its suppliers in Rajasthan with Ericsson, and plans to do the same in Tamil Nadu.

According to foreign media reports, a person familiar with the matter said that among Indian telecom operators, Bati Telecom is the most friendly to Chinese companies such as Huawei and ZTE. The companys decision to abandon Chinese companies should be forced and helpless under the pressure of the government.

Sunil Mittal, chairman of Bati Telecom, publicly supported Huaweis participation in 5g construction in India in October 2019. Ive been focusing on this industry for 25 years, and Huaweis products have been very good in the past 10 to 12 years, he said. I dare say that at least in the 3G and 4G era, Huaweis products are obviously better than Ericssons and Nokias, and I have used all of them.

Jio, Indias largest mobile operator, which belongs to reliance group, has submitted two 5g test applications respectively, one of which will cooperate with Samsung, and the other will operate on its own 5g technology.

At the 43rd Annual Shareholders meeting of Reliance Industries held in July, Mukesh Ambani, the richest man in India, announced that reliance had successfully developed a complete 5g solution, and the test could be carried out only after obtaining 5g spectrum.

The cost cannot be absorbed

In the 5g test in India, mobile suppliers will bear the full cost of the equipment.

Rajiv Sharma, head of securities research at Indias sbicap, said banning Huawei or ZTE products would increase the cost of 5g switching by more than 35%. Bati Telecom previously attended the hearing on 5g Network Construction organized by the Indian government, repeatedly said that if the 5g equipment in China was replaced by European products, it might lead to unbearable cost.

Chinas equipment is widely used in Indias 4G construction, but until now, some mobile operators, including Bati Telecom, have not recovered the construction cost of 4G. If 5g uses expensive European equipment, it will be more difficult to recover the cost.

In addition, another major concern of Indian mobile operators is that the Indian government has set the price of 5g spectrum too high, and the telecommunications regulatory authority of India (trai) has said it hopes to raise a staggering $84 billion in spectrum auctions. Indias mobile operators have been under financial and competitive pressure to lower the reserve price and postpone the auction.

On whether India will exclude 5g equipment from Chinese enterprises, Chen Jing told the first finance and economics reporter that Indias restrictions on Chinese enterprises are not a new thing. It has happened many times in the past, for example, Huawei has lost many orders in India for many times, but after a period of public opinion environment improved, the order came back again.

Chen Jing said that although 5g technology has a considerable future, it is not an urgent matter for India to build 5g. He said that Indias 4G construction has not yet been completed, and there is sufficient time for 5g construction. According to his experience, Chen Jing believes that when placing Telecom orders, India will make repeated inquiries from various companies, hoping to obtain an optimal price. In the future, if the European companies offer too high prices, it is also possible for India to switch back to Chinese enterprises.

India is very sensitive to price, and is more willing to delay time and win the advantage in price. I dont think it is possible for India to directly eat the 35% increase of European Telecom suppliers. Chen Jing said.

Source: Wang Fengzhi, editor in charge of the first finance and Economics_ NT2541