Chinese telecom equipment providers Huawei and ZTE being left out of India’s trusted suppliers sources could cause telecom operators in the region to spend 5 to 10 percent more on networking gear from other suppliers.
The Chinese firms being banned in the region would mainly affect local telecom giants like Airtel and Vodafone Idea. Although, the exact increase in gear costs might be a bit lowered considering non Chinese network vendors like Nokia, Samsung, and Ericsson would have less bargaining power in demanding a premium as there are fewer telecom carriers to choose from in the first place.
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According to Rohan Dhamija, head (India & Middle East) at Analysys Mason stated that, “If vendor options shrink with the new network security rules, incumbents could face around 5-10% rise in gear purchase costs, which they should be able to easily recover with the next round of price hikes likely soon,” when speaking with ET. Unfortunately, both Vi and Bharti Airtel have yet to respond to any queries or comment on the matter at the moment.
For those unaware, the Indian government recently declared a list of “trusted sources” for acquiring equipment for mobile networking systems and even amends certain telecom licenses as well. This move was seen as one of the first steps to restrict Huawei and ZTE’s role in India’s future telecom development as well as its 5G technology roll out. This also arrives amid growing political tensions between India and China, caused by military clashes in the Indo Chinese borders.
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