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Monday, July 15, 2024

Reviving Huawei and ZTE in India through localisation efforts

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In Short:

The Indian telecom industry is expected to change with the entry of Chinese equipment through joint ventures with domestic companies. This move will benefit local telecom firms and service providers by offering cost-effective alternatives. However, there is resistance from some local industry players. Despite international sanctions, Huawei is experiencing a comeback. Efforts are being made to bring Chinese players back to the mainstream in India by safeguarding the interests of all stakeholders.

Indian Telecom Industry to Witness Changes with Chinese Equipment

The Indian telecom industry dynamics are set to undergo a transformation with Chinese equipment entering the market through joint venture arrangements with domestic companies. This development is expected to benefit India’s local telecom firms, which have been lacking in research and development (R&D) investments and losing out on contracts. It also presents an opportunity for service providers to explore technologically-proven and cost-effective alternatives.

Challenges Ahead for Chinese Players

Despite the positive outlook, Chinese players face resistance from some segments of the local industry, including startups that claim to offer comparable products. However, these local players often lose out to multinational competitors even in public sector contracts. Recent efforts to improve the investment climate in India aim to address concerns surrounding Chinese businesses in the telecom sector.

Chinese investments in joint ventures with Indian entities, holding a majority stake, for products or solutions lacking technological expertise in India, indicate a move towards addressing industry concerns.

The setbacks faced by Chinese technology giants, Huawei and ZTE, due to international sanctions and geopolitical tensions, have not deterred their comeback efforts. Huawei reported a significant net profit increase in Q1, 2024, while ZTE is collaborating with Indian firm Celkon to develop Wi-Fi 6 routers in India.

“The state government’s support for the JV between Celkon and ZTE is an important development. We should hope that the decision follows a robust review of concerns by stakeholders,” noted telecom expert Mahesh Uppal.

Potential Collaborations and Market Share

Huawei, known for its extensive patent portfolio and expertise in 5G technology, is exploring partnerships with Indian companies for technology transfer and local manufacturing of telecom equipment. Chinese players have historically dominated India’s telecom gear market, with major telecom carriers like Bharti Airtel and Vodafone Idea as their top customers.

While cost-effectiveness has been a driving factor for considering Chinese products, a well-coordinated effort is essential to reintegrate Chinese players into the mainstream and safeguard the interests of all stakeholders.

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