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Huawei offers to sign a 'no-backdoor agreement'

Huawei has offered to sign a ‘no-backdoor agreement’, urging its rivals to follow the same approach.

, ET Bureau|
Updated: Jun 25, 2019, 08.31 AM IST
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NEW DELHI: Huawei has offered to sign a ‘no-backdoor agreement’, which will stipulate that it will not allow any snooping on its network or handing over of data, with the Indian government and mobile phone companies and has urged its rivals such as Nokia and Ericsson from Europe to follow the same approach.

“I would like to propose to the industry, no matter which country you are from, let’s sign the ‘no backdoor agreements’ with our customers and the Indian government to give the commitment, confidence and trust. We encourage other vendors and OEMs (original equipment makers) to sign these pacts,” Huawei India chief executive Jay Chen told ET. “I am ready to sign one today.”

Plan to Store Data Locally
Last month Huawei chairman Liang Hua had said his company was willing to sign ‘nospy agreements’ with governments to meet the ‘no-spy, no-backdoor’ standard. There have been widespread concerns that the Chinese government can misuse the company’s products and equipment for surveillance and espionage, a charge the company has repeatedly denied.

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To further address any security concerns around Huawei’s smartphones, Chen said the company will proactively shift data of Indian consumers to within the country.

“We give this commitment that we will store everything locally in India gradually. Some of the servers are in Singapore and some are in India. We will bring servers to India even if India doesn’t ask for it,” Chen said.

Chen’s comments come ahead of the visit of US Secretary of State Mike Pompeo to India during which the issue of Huawei’s participation in India’s 5G trials and eventual deployment is likely to figure. The US, which on May 21 barred Huawei’s products from its market and stopped US companies from supplying software and components to the Chinese company, has been pressing India and others to bar the company from their 5G development and deployment, citing concerns of Chinese surveillance on these networks. Australia and New Zealand have also barred the company from participating in their 5G trials while Germany and UK have not so far.

India is yet to take a decision. Indian telcos though have sought early clarity from the government to enable operators to take a longterm view in investment decisions since billions of dollars will be at stake. New telecom minister Ravi Shankar Prasad has said the government will take a view on whether the Chinese company will be allowed to participate in 5G trials and said there were security issues around it.

“This is the right time for the Indian government to make a decision and give clarity...India should take a collaborative and open approach to achieve the revenue target (of doubling to $350-$400 billion by 2025) for the ICT (information & communications technology) sector. There should be a level playing field,” Chen said.

Experts says under Chinese laws, Huawei is obligated to give customer data and information to its government, if it so demands. But Chen said the company has been put through the most stringent tests around the world, and there have been no complaints of any snooping incidents in the past.

“We hope that the Indian government would be able to take a positive call and increase investment from potential investors who are coming from China. There are cross-industry and ICT ecosystem companies waiting to invest in India,” he said.

Further, any move to bar Huawei will push up the cost of 5G deployment, which will ultimately hurt consumers, warned Chen. “We have to be there in the race, so there are checks and balances on prices...it’s going to be a supply and demand issue,” he said.

Huawei competes against Finland’s Nokia and Sweden’s Ericsson for the telecom equipment market with Samsung a relatively new player. Huawei, Nokia and Ericsson, besides China’s ZTE work with both Vodafone Idea and Bharti Airtel, while Samsung works only with Reliance Jio so far. ET recently reported that both Vodafone Idea and Airtel have started talks with Samsung to evaluate a ‘without-Huawei’ scenario.

Chen said that the company was at least 12-18 months ahead of its rivals in terms of 5G development. Asked about its plan B if Huawei is barred, Chen said the company doesn’t have one. “We don’t have a plan B. We are confident that it (India’s response) would be very positive,” he said. He added that the company has lined up millions of dollars in investments towards local manufacturing in India, developing the 5G ecosystem, including India-specific use cases and skill training with universities, which can only happen once it gets the nod from the Indian government. “We have shared proposals with the telecom department on 5G,” Chen said.

The Huawei executive also clarified that its Indian telco partners haven’t raised any concerns pertaining to the company’s supply chain following restrictions imposed by the US government.

“We are able to deliver whatever they want, in time. We have stock, in house development, other country resources,” Chen said.

Operationally, India continues to be a challenging market amid the financial stress of the mobile phone operators. But Chen expects tariffs to rise soon, which will improve the health of the telcos.

Huawei though expects its overall India revenue to fall this year – from the over $1.5 billion it recorded in 2018 – on the back of lower capital expenditure plans of its telco partners Vodafone Idea and Bharti Airtel.

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