China’s Huawei and ZTE Corp. are likely to be excluded from India’s 5G rollout plans as relations between New Delhi and Beijing hit a four-decade low following violent border clashes, Bloomberg reported.
The Indian government will apply investment rules amended in July that cite national security concerns to restrict bidders from nations the South Asian country shares land borders with an aim to keep out the companies, as per the news report.
The country’s Communications Ministry will restart pending discussions on approvals for 5G trials that were delayed by the Coronavirus-induced lockdown, they said.
It should be mentioned here that the US Federal Communications Commission (FCC) has also officially declared both companies “national security threats.”
While India permitted Huawei Technologies Co to participate in its 5G trials earlier this year, its stance against Chinese tech giants hardened after the military stand-off, which turned deadly in June.
“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,” said Nikhil Batra, Sydney-based analyst at International Data Corp.
“There’s already heavy reliance on Chinese equipment in its 4G networks. And shutting doors to Huawei and ZTE could increase costs of a switch to 5G by as much as 35%,” Rajiv Sharma, head of research at SBICAP Securities Ltd, said.
And Reliance could also be a serious challenge to Huawei in the world’s second-biggest wireless market after Indian billionaire Mukesh Ambani announced plans to soon roll out a 5G network using in-house-developed technology.
Yet, given the COVID-19 situation, the government may not be in a position to push for a 5G spectrum auction in the near future.