According to Gary Smith, CEO of Ciena, a piece of networking equipment, services, and software business, Indian telecom operators are “much more aggressively” attempting to “reduce their dependence” on Huawei. Smith stated during the company’s second-quarter results conference on Thursday that it has “seeing a lot of activity around the main carriers” in India “wishing” to minimize their reliance on Huawei. Smith further stated that the business has “won more than our fair share of those deals,” but that Ciena has “not yet deployed” its orders owing to COVID-related issues in India.
European telecom operators are taking their time transitioning away from Huawei
According to the Ciena CEO, Indian telecom operators are “probably more aggressive” than telecom operators in “other areas of the world” in attempting to lessen their reliance on Huawei.
“The main region to date has been Europe, where you’re seeing a slow migration or a reduction in dependency on while it’s largely being run initially out of the RAN business where they’re seeing it first, and then getting to the core infrastructure,” Smith said during the company’s second-quarter earnings call. “So that takes time, and it is a dynamic that I believe is widely acknowledged and discussed.”
In the long run, Jim Moylan, Ciena’s chief financial officer, stated on the company’s second-quarter earnings call that the “Huawei dynamic is favorable.” However, Ciena’s CFO stated that the business has “always been” concerned about “how quickly” European telecom carriers can “transition away from Huawei,” adding that “it’s just going to take long.”
“They are not going to rip and replace in Europe,” added Moylan. “Not going to happen.”
Meanwhile, ET Telecom reported on Thursday, citing “people familiar with the subject,” that Vodafone Idea, India’s third-largest operator, has made an “add-on network order with Huawei.” According to the magazine, Vodafone Idea’s new order is worth Rs 400 crores to 450 crores and was placed “soon before March 10.” It should be mentioned that the Department of Telecommunications (DoT) amended the telecom licensing agreement in a notification issued on March 10, 2021, requiring operators to get telecom equipment from “trusted sources.” The Department of Transportation stated in its notification that the adjustment to the telecom licensing agreement would take effect on June 15, 2021.
In India, the underlying dynamics and demand are “strong.”
Smith had stated that India has economic and “some regulatory concerns” and that it had been a “strain” in the previous “two or three years.”
“But I believe the fundamental fundamentals and demand remain strong,” Smith added. “I believe order and RFP (request for proposal) activity is continuing to be robust as they implement their plans, and we are winning more than our fair share of that.”
According to Ciena’s CEO, the business would “continue to expect India” to expand YoY in the current fiscal year, with “any near-term issues alleviated by our broad regional diversity.”
“Overall, our business is driven by the strong underlying secular need for bandwidth and automation,” Smith added.