5G Test Run: Is Barring Huawei A Good Idea? Probably Not

Even before the 5G wave hits Indian shores, a ripple of discomfort is dogging this new mobile technology. The worry is about whether Chinese telecom equipment maker Huawei should be allowed to participate in the field trials for 5G technology.

The Narendra Modi government has now left the matter to a committee, headed by the Principal Scientific Adviser, to look into the issue of Huawei’s participation in India’s 5G trials. The committee is supposed to submit its recommendations soon and based on that, the telecom ministry will take a final call.

What has triggered this buzz of concern about Huawei? There is a niggling doubt that by allowing Huawei to participate in 5G trials, the country’s security could, in some way, be compromised. Put simply, there is a long-standing suspicion that Huawei’s products spy for China.

The apprehension is perhaps fuelled by the fact that Huawei’s founder Ren Zhengfei, at one point, was associated with the People’s Liberation Army’s (PLA) research institute as a military technologist reportedly in the PLA’s Information Technology research unit. Ren, however, did not hold any military rank.

And this concern about Huawei is not confined within the boundaries of this country alone.

Driven by this apprehension, in May, the US had barred Huawei’s products from its market and stopped US companies from supplying software and components to the Chinese company. It now wants India to do the same, citing concerns of Chinese surveillance on these networks. Australia and New Zealand have also barred Huawei from participating in their 5G trials.

Huawei has obviously denied all such allegations. In fact, the Chinese company has offered to sign a “no back door” pact with the Indian government to assuage concerns that it might use its telecom gear for surveillance.

In fact, defending its position, Huawei had argued that it had already deployed 5G technology in India through MIMO (multiple input, multiple output, which increases spectrum efficiency), and that the security concerns raised against it have no foundation.

The moot question now is, what should India do under the circumstances. Given the fact that Huawei is deeply entrenched in the country’s telecom industry for long, the answer may not be easy.

So far in India, Huawei has won support from government authorities as well as the industry. Interestingly, in December last year, the Telecom Export Promotion Council — the country’s  telecom export body — had requested National Security Advisor Ajit Doval to ban the purchase of equipment from Chinese companies such as Huawei, ZTE and Fiberhome for government networks. But the government had then indicated that there was no proposal to ban Huawei. It had also argued that most other vendors also source components from China.

Not only the authorities, but the Cellular Operators Association of India, the apex body of telecom operators, had in the past come out in support of Huawei.

It is not very difficult to understand why industry representatives are in favour of the Chinese vendors. Telecom, particularly the 5G play, is a high-stake game and the existing players are already suffering from their previous cash burns. So, they need to find vendors and suppliers who can offer them competitive rates for telecom gear.

Chinese vendors have always been price competitive, which is very crucial for the Indian market that has one of the lowest average revenue per user (ARPU) metrics in the world. It is obvious that without cheap equipment, it will not be possible for local operators to offer attractive deals to their customers.

There is also another point. Besides providing low-cost equipment, the Chinese vendors offer staggered payment plans, spread over many years. This is obviously a great advantage for the Indian telecom operators as it allows them to reduce capital expenditure.

Indeed, such is the attraction of Huawei that, according to a Bloomberg report, American technology companies have resumed selling certain products to the Chinese company after concluding that there are legal ways to work with the telecom equipment maker in spite of its inclusion on a Trump administration blacklist. In fact, going by the latest reports from Osaka, President Trump, during his meeting with Chinese President Xi Jinping, has agreed to lift some of the restrictions on Huawei.

Technology has a tendency to transcend boundaries despite many barriers. And if such a technology helps in offering better and more affordable products, then users across the world should get a chance to enjoy such benefits. So, merely on the basis of a suspicion, it may not be a prudent idea to keep Huawei away from the 5G trials in this country.―Money Control