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India May Hold Inter-Ministerial Talks Before Call On Huawei

The government plans to hold inter-ministerial consultations on network security concerns arising from Chinese telecom gear maker Huawei’s participation in field trials for 5G technology after global calls to ban the company. While the US has urged its allies to bar Huawei from 5G roll-outs, Japan, Australia and New Zealand have banned its equipment and a few countries may follow suit in Europe, Huawei’s biggest market outside of China.

“There are some security concerns…but these concerns are not crystallized yet. The home ministry, department of industrial policy and promotion (DIPP), department of commerce, IT ministry and department of telecommunications (DoT) will have to sit together and discuss this before any decision is taken,” a senior government official said, requesting anonymity.

Separately, DoT has also put in place security testing specifications to be conducted in India for telecom gear sold by any vendor from 1 January.

As the world gears up to roll out 5G, the next generation of wireless communication networks, Huawei Technologies Co. Ltd is facing increased opposition from governments that are worried that its telecom equipment could be used by Chinese intelligence, something the company has always denied.

France’s largest telecom operator, Orange SA, said it won’t use Huawei gear to build 5G networks, after BT Group Plc in the UK pledged to rip out some of the company’s equipment. It said Germany’s Deutsche Telekom AG has raised the prospect of dropping Huawei and the Norwegian government said it was considering whether to use suppliers from countries with which there’s no security policy cooperation—an oblique reference to China.

India is, however, a much bigger market for telecom services. To put it in perspective, Airtel’s user base alone is more than the entire population of the US. Moreover, India still has a significant chunk of population, which does not have access to the internet.

“Right now, Huawei is doing small-scale trials with operators and not large, nationwide field trials and permission for trials can be revoked also if the government wants. But the pros and cons of banning any company supplying telecom equipment has to be weighed in the Indian context, as there are risks that it may affect deployment of services to users in India,” said the official cited earlier.

“We have not received any official communication to this effect,” a spokesperson for Huawei India said, responding to Mint’s query on whether the Indian government had expressed security concerns about its participation in 5G trials and roll-out. The company also said it had received an invitation from DoT to conduct 5G trials, which Huawei expects to start in January-March.

While any loss of business for Huawei would mean an automatic advantage for European rivals such as Ericsson and Nokia, which are in the midst of cost-cutting measures to boost margins, as also South Korea’s Samsung, it would also lead to disruptions as most global telecom operators have already ordered gear from the Chinese company. Huawei sells smartphones, network equipment such as antennas, routers, and software for networks.

In India, Huawei has conducted 5G trials at Bharti Airtel’s facility in Haryana.

“Telcos prefer Chinese network providers as their equipment is almost 25% cheaper than a European counterpart and they also facilitate low-interest loans from Chinese finance companies,” a top official at an operator said, requesting anonymity. “Moreover, banning Huawei would mean that India would be almost entirely dependent on Europe for telecom gear, which is again not a favorable proposition. India needs at least four equipment makers to meet local demand for network.”

Emails sent to DoT, DIPP, the IT ministry, department of commerce and ministry of home affairs were unanswered at press time.

In a 17 December letter, the Cellular Operators Association of India urged DoT to conduct its own due diligence, arguing moves to impose curbs on Huawei lacked merit and that arbitrary exclusion of certain firms on hearsay may be detrimental to India’s overall digital communications aspirations. – Live Mint

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