Rémy Pascal, practice leader, mobile infrastructure and RAN lead analyst at Omdia, told RCR that Chinese equipment currently deployed in telecom networks in India has been operating for several years, with no new installations in recent years
In sum – what to know:
Decision pending – India’s Ministry of Home Affairs is gathering information, but no formal decision or timeline for a rip-and-replace program has been established.
Costs depend – Network disruption and replacement costs could be significant, but the impact will depend largely on the timeline and how much equipment reaches end-of-life.
Vendors positioned – Ericsson, Nokia, Samsung, and Tejas Networks are best positioned to benefit, while emerging domestic vendors could also gain opportunities.
India is considering a potential program to remove legacy Chinese telecoms equipment from cellular networks, with the government gathering information from local carriers on their reliance on equipment from companies including Huawei and ZTE.
The Ministry of Home Affairs (MHA) is leading the process, while the Department of Telecommunications (DoT) is collecting information from service providers on their exposure to Chinese equipment. A final decision on whether to replace the equipment would be made by the MHA, according to Indian press reports.
The potential program would not affect India’s 5G networks because Chinese telecom vendors have not supplied equipment for these networks, having not been designated as “trusted source” vendors for 5G. Chinese equipment already deployed in networks has nevertheless been allowed to remain.
Rémy Pascal, practice leader, mobile infrastructure and RAN lead analyst at Omdia, told RCR Wireless News that the impact on operators would depend significantly on when any restrictions are implemented. “The impact in terms of cost and network disruption would not be negligible but largely depends on the timeline,” Pascal said. “The Ministry is currently gathering information, with neither a formal decision nor a defined timeline yet established.”
Chinese equipment currently deployed in Indian networks has been operating for several years, with no new installations in recent years, Pascal said. As a result, the longer it takes for new restrictions to become reality, the more of that equipment will reach end-of-life and require replacement regardless.
Indian operators Bharti Airtel, Vodafone Idea and state-owned Bharat Sanchar Nigam Limited (BSNL) have used Chinese equipment in their networks, while Reliance Jio Infocomm has not deployed Chinese telecoms equipment and has developed its own RAN equipment.
The potential replacement program could therefore create a significant equipment replacement cycle across existing 4G and fixed networks. Moneycontrol reported that replacing the Chinese equipment could cost Airtel and Vodafone Idea up to $3 billion.
However, Pascal said the effect on equipment prices from reduced competition may not be as significant in India as it has been elsewhere, given the size and negotiating power of Indian operators.
A potential US-style approach could also provide some financial support for operators. “Finally, should policymakers take example from the U.S. rip-and-replace program model, there could potentially be public funding to offset some of the costs,” Pascal said.
The potential removal of Huawei and ZTE equipment would also affect the competitive landscape for network equipment vendors, although Pascal said India’s market has already undergone significant changes in recent years.
“India’s mobile network equipment market has already seen significant changes in recent years, and the impact in terms of vendor landscape and competition has been largely absorbed already,” he said.
Existing vendors supplying operators that continue to use Chinese equipment would be best positioned to benefit from a replacement cycle, according to Pascal. “That said, the existing 4G and 5G vendors currently supplying the operators that still use Chinese equipment in their networks are the best positioned to benefit. These are primarily Ericsson, Nokia, Samsung, and Tejas Networks.”
“This could also represent an opportunity for other emerging domestic vendors,” Pascal said. “It is conceivable that this could be linked to India’s industrial policy which aims to develop a domestic telecom infrastructure ecosystem.”
If approved, the program would place India alongside other markets that have moved to replace or restrict Chinese telecoms equipment, including the U.S, the U.K, Denmark, Germany, Sweden, Estonia, Latvia, and Lithuania.
