India Joins US & Australia to Give Huawei, ZTE 5G Cold Shoulder – Reports

Gagandeep Kaur
9/17/2018

There seems to be no end to the backlash against Huawei and ZTE. After the US and Australia recently took steps against the Chinese vendors, local reports now suggest it is the turn of India's government to restrict their role in 5G developments.

According to multiple reports in the Indian business press, the Department of Telecommunications (DoT) has excluded Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) from the list of firms asked to participate in trials aimed at developing "India-specific" 5G use cases. That list includes most of the prominent global vendors, including Cisco Systems Inc. (Nasdaq: CSCO), Ericsson AB (Nasdaq: ERIC), Samsung Electronics Co. Ltd. (Korea: SEC) and Nokia Corp. (NYSE: NOK).

Huawei, however, is denying it been shunned by the DoT and says it is broadly engaged in various 5G-related activities in India, though details of its position in relation to the DoT's 5G use case developments are currently unclear.

What is very clear, though, is the increasing pressure being heaped on the Chinese vendors in major markets around the world. Australia's government banned Huawei and ZTE from selling 5G network equipment in the country. US authorities have also tried to prevent American telcos from procuring equipment developed by the two Chinese companies. The US has also taken steps to restrict the sale of Huawei devices in the US. As for ZTE, it has only just had a ban lifted on its purchase of critical US components, after it was forced to pay a hefty fine and overhaul its entire business. US authorities had charged it with breaching sanctions against Iran and North Korea, and then of lying that it had made organizational improvements. (See Australia Excludes Huawei, ZTE From 5G Rollouts and ZTE Back in the Game, Seeking Trust & 5G Deals.)

Huawei is also under scrutiny in the UK, where experts at the Huawei Cyber Security Evaluation Center (HCSEC) said earlier this year they could provide "only limited assurance that all risks to UK national security from Huawei's involvement in the UK's critical networks have been sufficiently mitigated." (See Huawei Poses Security Threat, Says UK Watchdog.)

The allegation that Huawei poses a Western security threat because of its close links to the Chinese state dates back years. Despite that, Huawei has grown to become the world's biggest supplier of network equipment to communications service providers. While it initially had a reputation as a low-cost imitator, it is now seen to be at the forefront of many network technologies by some of the world's leading operators. (See Huawei Shrugs Off Challenges With Surge in H1 Profit.)


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Huawei and its supporters have argued that action against the company is politically motivated: US President Donald Trump, of course, is currently waging a controversial trade war against China. But even before Trump came to power, Huawei had faced resistance both inside and outside the US. Authorities in India, for instance, banned Huawei imports in 2010 on national security grounds. That ban was subsequently lifted.

India's government has now set up a high-level task force to develop the 5G ecosystem in the country. It has also established a $77 million 5G testbed to support the service providers developing 5G products and services. The Indian Institute of Technology at Chennai, Mumbai, Delhi, Hyderbad and Kanpur is to work with the Indian Institute of Science on setting up and maintaining this testbed. (See India Steps Up Its 5G Efforts .)

The reliance of some 5G services on pools of customer data could partly explain why authorities are suddenly more concerned about security. But with growing tension between China and India, any move to exclude Huawei from any 5G developments could have a political motivation. Whatever the catalyst for the DoT's reported decision, the Chinese vendors have a battle on their hands to carve out a position in the country's future 5G market.

— Gagandeep Kaur, contributing editor, special to Light Reading

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