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    China’s Huawei, ZTE set to be shut out of India’s 5G trials

    Synopsis

    The South Asian nation will apply investment rules amended on July 23 that cite national security concerns to restrict bidders from nations it shares land borders with to keep out the companies, people familiar with the issue said, asking not to be identified citing rules.

    AFP
    While India allowed Huawei to participate in its 5G trials earlier this year, its stance against Chinese companies hardened after China’s actions along their disputed border in early May.
    By Archana Chaudhary, Ragini Saxena, P R Sanjai and Saritha Rai

    China’s Huawei Technologies Co. and ZTE Corp. are set to be kept out of India’s plans to roll out its 5G networks as relations between the two countries hit a four decade low following deadly border clashes.

    The South Asian nation will apply investment rules amended on July 23 that cite national security concerns to restrict bidders from nations it shares land borders with to keep out the companies, people familiar with the issue said, asking not to be identified citing rules.

    The Ministry of Communications will restart pending discussions on approvals for 5G trials by private companies including Bharti Airtel Ltd., Reliance Jio Infocomm Ltd., and Vodafone Idea Ltd. that were delayed by the nationwide lockdown, they said.

    India’s decision echoes actions by the U.S., U.K. and Australia, which have raised red flags about the companies’ Chinese government links. The U.S. Federal Communications Commission has officially declared both companies national security threats.

    The process to auction 5G may spill into next year, according to the officials. A decision on the ban is expected to be announced in a week or two after approval from the prime minister’s office, they said.

    A spokesman for the communications ministry and the prime minister’s office didn’t immediately respond to queries seeking comment.

    Border Tensions
    While India allowed Huawei to participate in its 5G trials earlier this year, its stance against Chinese companies hardened after China’s actions along their disputed border in early May. That military standoff, which turned deadly in June killing 20 Indian soldiers and an unknown number of Chinese troops, is now in its fourth month.

    Huawei and ZTE didn’t respond to emails seeking comments.

    “Telecom infrastructure has become part of national security assets and nations are looking at controlling and regulating them just like they do power and water,” said Nikhil Batra, Sydney-based analyst at International Data Corp. “But the Indian market is already battling infrastructure and regulatory problems. The network equipment market is a small one. So India’s challenges will compound from such a decision.”

    Telecom companies were expected to invest $4 billion in setting up 5G infrastructure, according to IDC estimates.

    That could be tough as companies including Bharti, Vodafone Group Plc and even state-run firms continue to struggle to make existing 4G networks profitable. There’s already heavy reliance on Chinese equipment in its 4G networks. And shutting doors to Huawei and ZTE could increase costs of a switch to 5G by as much as 35%, according to Rajiv Sharma, head of research at SBICAP Securities Ltd.

    Reliance Challenge

    Reliance could be a serious challenge to Huawei in the world’s second-biggest wireless market after Indian billionaire Mukesh Ambani on July 15 announced plans to soon roll out a 5G network for his Jio Infocomm using a technology developed in-house, without giving details.

    His conglomerate has said its carrier won’t need to spend much to switch to the new system, unlike some of its rivals, leaving it immune to political disputes linked to Chinese equipment vendors that global telecommunications companies are embroiled in.

    Yet, with its economy headed for a ‘deep slump’ amid a worsening Covid-19 pandemic, the government may not be in a position to push for a 5G spectrum auction in the near future.

    --With assistance from Santosh Kumar.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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    19 Comments on this Story

    Sharad Shirali41 days ago
    people like rahul gandhi deep friends with chinese..what say
    Shiv Nayanar43 days ago
    CHINA taught INDIA a DEFINITE and BEST lesson ever Atleast now INDIA should stop trusting, falling and Relying on other countries It's this blind faith INDIA Invested in CHINA, which took advantage and Stabbed INDIA behind her back Even now if INDIA don't understand and develop self-Reliance all by itself for INDIA THEN no power on this Earth will ever be able to HELP INDIA It's not that she is weak INDIA proved it in GSLV, Nuclear Devices, Chandraayan and many more. So can INDIA make weapons on it's own required to protect it's borders INDIA do it we can Do it. ... Jaihind
    Suresh Kamath43 days ago
    KEEP these CHINI Bhais AWAY and NONE needed ever again to back stab during the LAC Position and MOU between the CCP China and the Congress party signed in 2008 MUST be made PUBLIC and action taken against all such illegal IMPORTS from China then and there was NO export to them from India and hence India suffered a great deal and CHINA also grabbed the 45000 Sq M area of the Border as "GIFT" to these CHINI Bhais viw this MOU
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