India's Department of Telecommunications (DoT) is likely to approve 5G trial applications by service providers soon – but only with non-Chinese vendors, according to media reports.
Essentially, this means that private telcos Bharti Airtel and Vodafone Idea, which have applied for approval to conduct 5G trials with Nokia, Ericsson, Huawei and ZTE, will now only get clearance for the European vendors.
Company policy of not using Chinese equipment in its network is now paying off. Reliance Jio also requested approval to test its own 5G solution.
India plans to conduct a 5G spectrum auction in the coming year.
Media reports also suggest the Indian government will bar telcos from using Chinese equipment in the forthcoming 4G spectrum auction as well.
Chinese products are known to be cost-effective, and over the years this has helped Indian telcos bring down the tariffs.
If vendors are barred, it is possible India's telcos might try to get the government to compensate them for having to use expensive non-Chinese equipment.
It could even help in bringing down the high reserve price of the soon-to-be-auctioned 5G spectrum.
There was a standoff between Indian and Chinese armies in the Ladakh region earlier in 2020, which led to a surge in anti-Chinese sentiment.
The Indian government has already adopted measures to reduce dependence on Chinese products, including a ban on state-owned telcos dealing with the Chinese vendors.
When one door closes
From October 1 onwards, all new telecom equipment will need to be tested by the Indian authorities before being deployed by service providers.
The administration also altered the Foreign Direct Investment (FDI) rules, making it mandatory to get clearance for any investment by countries that share a land border with India.
Although the government is not going for an outright ban of Chinese vendors like Australia and the UK for example, it is making it difficult for Chinese firms to do business in the country.
Growing anti-Chinese sentiment means Indian telcos are unlikely to renew contracts or issue new business with Chinese vendors once they expire.
As these relationships become more difficult, it opens the doors for domestic and non-Chinese vendors to grab the vacant space.
- India's new FDI rules are another headache for Chinese vendors
- Indian backlash against China spells opportunity for homegrown vendors
- India to test telecom gear as tension rises with China
— Gagandeep Kaur, contributing editor, special to Light Reading