Despite international security interests, losing giants like Huawei and ZTE may not be a viable option. Sonam chandwani, executive partner of kslegal & Associate, a Mumbai law firm, commented.
Why do Indian companies need Huawei?
Indias telecom industry relies heavily on Huawei and ZTE, mainly because they are more economical than other options.
Most of Huaweis revenue in India comes from 4G network equipment business. Bharti Airtel and Vodafone idea, Indias two largest telecom companies, account for 55% of Indias wireless telecommunications market.
ZTEs customers, on the other hand, include state-owned bsnl, which has about 40% of its 3G network built by ZTE.
The two Chinese companies have been at the heart of Indias 5g ambitions. In 2018, Bati and Huawei jointly conducted Indias first 5g network test. Earlier this year, Vodafone creative announced a 5g test with Huawei, ZTE, Ericsson and Nokia.
Huawei has won a reputation in the telecom industry with its affordable price, local investment and long-term repayment plan. Indias telecom industry needs players like Huawei to save it from suffering. Chandvani said.
Fierce competition from reliance Ji, a unit of Mukesh Ambani, Indias richest man, has been damaging the creativity of Bati Telecom and Vodafone. Vodafone creative lost 254.6 billion rupees (US $3.9 billion) in the quarter ended June 30, while Bati lost 159.3 billion rupees (2.4 billion US dollars).
Switching to other options will be a challenge, especially on the financial side, as operators are already facing the problem of the adjusted total revenue payable. This will have more impact on Barty and Vodafone than on Ji, said Ankit Malhotra, an analyst at counterpoint research in Hong Kong
Can Huawei and ZTE be replaced?
In addition to Chinese companies, other options for Indian telecom network equipment include SamSung of South Korea, Ericsson of Sweden and Nokia of Finland.
Malhotra of counterpoint says these companies are already active in India, but turning entirely to them could lead to higher procurement costs and lower competitiveness in the 5g sector..
In the past 10 or 12 years, Huawei has become very good in terms of products. Today, I can safely say that their products are obviously better than Ericsson and Nokia in terms of 3G and 4G at least. Sunil Mittal, a veteran of Indias telecommunications industry and chairman of Bharti Airtel, said in 2019.
However, a ban on Chinese equipment would benefit an Indian Telecom Company disproportionately, Ambanis reliance Ji.
In July of this year, Ambani announced that its flagship company, Ji platform, a subsidiary of Reliance Industries, had developed its own 5g solution and was ready for field deployment next year. This makes Ji the first Indian telecom company to have 5g capability.
While other companies will struggle with the additional cost of financing and replacing infrastructure, Jiao will enjoy the cost-effectiveness of its in-house solutions. Malhotra said.
Source: c114 communication network editor: Liu Fei_ NBJS10390