Agency highlights Huawei ban threat to Indian 5G infrastructure

Agency highlights Huawei ban threat to Indian 5G infrastructure

US rating agency Fitch has confirmed what the big three Indian operators probably already suspected: that any ban on Huawei could raise their expenditure on 5G infrastructure.

The argument that Indian service providers may need to invest more on 5G capex if Huawei is not involved is based on the belief that, while the company’s 5G technology is certainly of the required standard, it is also usually cheaper than that of Huawei’s competitors.

Fitch’s assessment hasn’t gone unnoticed in India, where Sunil Mittal, founder and chairman of Bharti Enterprises, which includes Bharti Airtel, India’s second-largest operator, has been quoted as saying that Huawei should be allowed to help build India’s 5G networks.

This isn’t just a matter of Indian operators getting a good deal. Not only can Huawei boast strength in developing 5G technology, but the potentially cheaper kit it can offer may be desperately needed by cash-strapped Indian operators.

Market leader Reliance Jio introduced extreme competition to the market with cheap data tariffs and free voice calls, but now all three major operators may have to find cash to pay for 5G spectrum at auctions – and it doesn’t look like the spectrum pricing will be very attractive.

That said, competing vendors like Samsung, Nokia and Ericsson could benefit from a Huawei ban. At the moment Huawei is among six companies that have submitted proposals to participate in the country's 5G trials.

For the moment there is no clear indication that Huawei’s position is under any threat. However, a special committee has been appointed to examine potential security concerns.

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