Representative image. | Photo credit: iStock Images
Key points
- Earlier this year, the Department of Telecommunications formulated a special panel to look at the possible participation of Chinese companies in India’s 5G trials.
- India’s wireless infrastructure already relies heavily on equipment made by Huawei and ZTE
- So far, the cost efficiencies that Chinese equipment has provided have made it highly sought after by the country’s telecommunications companies.
On Wednesday, the Cabinet approved the National Security Directive in the Telecommunications Sector that could result in restrictions on the acquisition of Chinese telecommunications infrastructure by Indian telecommunications companies. According to the directive, the government will designate “trusted sources” and “trusted products” to be integrated into the architecture of the country’s telecommunications network. The move is the latest in a series aimed at curbing India’s dependence on Chinese teams. India has already implemented bans on the importation of Chinese equipment in a variety of sectors for national security reasons.
The decision by the Government of India is likely to have broad implications in India’s quest to become a 5G-enabled nation. Earlier this year, the Department of Telecommunications formed a special panel to look at the possible participation of Chinese companies in India’s 5G trials. According to some reports, Huawei and ZTE, two Chinese teams had requested to participate in the country’s 5G trials. However, the panel reportedly concluded that Chinese companies should not participate.
India’s wireless infrastructure already relies heavily on equipment made by Huawei and ZTE. The government’s original decision to invite all vendors and operators to participate in India’s 5G trials raised serious concerns among many who claimed that backdoors and malware that endangers India’s national security may be embedded in his team. It is also worth noting that Huawei threatened to reduce investment in India if it was banned from participating in India’s 5G sprint.
But the reality is that telecommunications companies such as Bharti Airtel and Vodafone have increasingly used Chinese equipment to establish certain network circles. So far, the cost efficiencies that Chinese equipment has provided have made it highly sought after by the country’s telcos. According to some reports, Indian telcos had drafted a letter to the Department of Transportation urging it to remove vendor-based restrictions on 5G trials. They had reportedly requested an import duty exemption on the 5G test equipment while advocating for the freedom to test in any relevant area using the assigned spectrum.
To understand just how big the key in the works this could prove to be for the 5G ambitions of Indian telcos, it is worth noting that, earlier this year, state operator BSNL informed authorities that tariffs Charged by Indian providers were a staggering 89. percent higher than those from international providers. BSNL and MTNL were unable to use Chinese equipment this year.
Despite the fact that the ‘Make in India’ initiative is close to the heart of Prime Minister Narendra Modi, India has not demonstrated the ability to locally develop a full 5G stack at scale. Several experts have pointed out that if the country wants to avoid missing the 5G train, more incentives are required for the development of next-generation technology.
On the other hand, the latest directive may be good news for other international providers such as Ericsson, Nokia, Samsung, Cisco and NEC. Indian telcos generally have relied on a great mix of providers to diversify risks and reduce costs. However, the seemingly closing door for Chinese vendors may benefit others like Nokia and Ericsson and specifically in light of India’s inability to produce equipment that integrates the most advanced features, functionality and capabilities.
