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India sees no threat in Huawei yet

"Let the Centre investigate the concerns raised (against Huawei). We request all the vendors (not excluding anyone) to adhere to certain standards that we put in place.”

Dec 21, 2018 by The Passage Team
India sees no threat in Huawei yet

At the time when multiple countries have shown concern citing security reasons and banned Chinese telecom firm Huawei Technologies from performing 5G trials, the company got some relief from Indian government as it has not banned it outright.

Officials said, while India is mindful of the issues, it does not want to single out any particular player in the trial of the next generation technology.

“We are closely working with the department of telecommunication, and 5G trial discussions are going on with each vendor and proposals are invited from all,” Pamela Kumar, Director General of Telecommunications Standards Development Society, India, said.

Regarding the security concerns raised over its 5G trials, Kumar said, “While we have helped them (Department of Telecommunication or DoT) to bring more standardisation, let the Centre investigate the concerns raised (against Huawei). We request all the vendors (not excluding anyone) to adhere to certain standards that we put in place.”

“We want to roll out 5G on par with other countries and embrace technology with the rest of the world."

When The Passage reached out to Huawei India, the company said it does not want to comment on the story. “Even though the media reported we were not allowed by India government for 5G trials, in October we were invited by the DoT to be a part of the 4G trials,” the company spokesperson said.

Though the Indian DoT did not include Huawei as one of the vendors for the 5G trial announced in September, it gave permission a month later, silencing the regulatory concerns raised by competitors.

Nokia, Ericsson, Huawei and ZTE have production ready equipment in trials based on 5G-New Radio standard. According to reports, Huawei has a market share of about 15% in the network business in India.

In the last two months, countries such as US, Japan, New Zealand, Australia, Canada and UK have blocked the Chinese telecom giant from building 5G networks because of its possible links to the Chinese government. The security concerns also come as Ren Zhenfei, Huawei’s founder was a former officer of the People’s Liberation Army in China.

On December 1, when US President Trump and Chinese President Xi Jinping sat for a discussion at the G20 summit, Meng Wanzhou, Huawei's chief financial officer and daughter of its founder was arrested in Canada for possible violations of US sanctions on Iran.

Japan’s leading newspaper "Yomiuri Shimbun" on December 7 reported that Japan would revise government procurement regulations and prohibit government departments from purchasing communications equipment from Huawei.

However, the company denied all the allegations against it.

More than 100 countries deploy Huawei's products and solutions, and it supports the communications needs of one third of the world's population. India’s association with Huawei dates back almost two decades.

Outside of China, Huawei established its largest overseas R&D centre in Bengaluru in 1998 employing over 4000 Indian software engineers. The company has a network partnership with leading telecom players in India like Airtel, Vodafone-Idea, BSNL and Reliance Jio.

The Big 5G Market in India

Being the second most populous country in the world, with low internet penetration, India is at the cusp of digital transformation and is trying to realise commercial viability across 5G based networks.

According to Internet and Mobile Association of India, internet penetration in urban India stood at 64.84% in December 2017 as compared to 60.6% in 2016. In rural India, internet penetration was 20.26% of the total population.

By 2023, an estimated one billion 5G devices are expected to be connected worldwide.

Seeing the vast 5G network market, India indeed needs a reliable network provider. But the security concerns around Huawei is a classic case of no smoke without fire.

In 2012, the state-owned Bharat Sanchar Nigam Limited (BSNL) partnered with Huawei to modernise its national communications network, which replaced 4 million telephone lines in two phases. The move faced criticism from various quarters, and in February 2014 Huawei's engineers were blamed for the hacking of a mobile tower in Andhra Pradesh, one of the southern states.

In July 2015, the Indian Home Ministry approved a Huawei project to set up an electronics and telecommunications device manufacturing factory in Sriperumbudur near Chennai. Cyber security concerns led the Indian government to issue various amendments to the contract, such as requiring Indian nationals to fill critical positions in the factory.

Data shows that as early as 2008, Huawei's total contract value in India has exceeded USD 2 billion, and sales revenue reached USD 1.3 billion. According to the Indian government, by 2035, the cumulative economic impact of 5G on India is about USD 1 trillion. Ericsson's report estimates that 5G will bring USD 27 billion in revenue opportunities to Indian telecom operators by 2026.

Commenting on the development, Rajan Mathews, Director General, Cellular Operators Association of India, said, "There has to be a level playing field for all. What we need to understand now is whether the ongoing ban is a trade war or a security war as projected by a few countries.”

Rajan added that there is vulnerability at every stage (software, devices, hardware), the government should put checks and balances in place to address the security concerns.

“If we exclude a player like Huawei, tech adoption of the nation is going to impact. Huawei was so transparent that in 2010, they were the first company to come forward and say they’ll share the source code and engineering designs for its equipment as required by the Indian government,” Mathew added.

On the other hand, its smartphone business in India is on the uptrend. Huawei plans to open 1000 stores by 2020 for the smartphone segment. The company plans to spend about USD 100 million over the next two years for device manufacturing in India.

(With inputs from Shiming Shao, a Shenzhen-based reporter.)

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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