As Bloomberg reports, Chinese suppliers Huawei and ZTE will be excluded from India’s 5G network construction plan.
People familiar with the matter said that India will implement the investment regulations revised on July 23. It will restrict bidders from countries bordering India and exclude these companies based on national security issues.
Also Read: After Banning Huawei And ZTE, Nokia Threatens To Abandon Indian Operator
They stated that the Ministry of Communications of India will resume discussions on approving 5G trials for private companies. They include Bharti Airtel, Reliance Jio Infocomm, and Vodafone Idea. Also, they have postponed the trial due to a nationwide lockdown order brought about by the epidemic.
India tries to discourage wireless operators from buying Chinese equipment
India’s decision is consistent with the actions of the United States, Britain, and Australia. The US Federal Communications Commission (FCC) has listed two Chinese companies, Huawei and ZTE, as national security threats.
Indian government officials said that the 5G auction may be delayed until next year. They stated that the decision on the ban is expected to be announced within one to two weeks after approval by the Prime Minister’s Office.
Disable Chinese apps
Although India announced earlier this year that Huawei was allowed to participate in its 5G trials, after the border conflict between China and India, in June of this year, India banned dozens of Chinese apps including TikTok.
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Nikhil Batra, an analyst at International Data Corp in Sydney, said: ‘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. 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.’
According to IDC estimates, Indian telecommunications companies are expected to invest $4 billion to build 5G infrastructure.
This may be difficult because companies including Paldi Telecom, Vodafone Idea, and even its state-owned telecommunications company are striving to make existing 4G networks profitable. India’s 4G network relies heavily on Chinese equipment. Rajiv Sharma, head of research at SBICAP Securities, said that disabling Huawei and ZTE may increase the cost of upgrading to 5G by up to 35%.
Trust challenge
After Indian billionaire Mukesh Ambani announced on July 15 that it will soon use its internally developed technology to launch a 5G network for its Jio Infocomm, Reliance Industries may become the world’s second-largest wireless market for Huawei.
Reliance Industries has said that unlike some competitors, Jio Infocomm can switch to the new system without spending too much money. This will protect it from political disputes involving Chinese equipment suppliers that global telecom companies are involved in.
However, with the intensification of the new coronavirus epidemic, India’s economy is heading for a ‘deep recession’. And the government may not be able to promote 5G spectrum auctions in the near future.
