Prolonged Coronavirus Epidemic to Stifle Indian Telecom Operations: 30% Rise in Network Gear Costs

Network gear procurement costs in India will rise by at least 23-30% if China fails to contain the coronavirus epidemic within one month. Airtel, Vodafone Idea have expressed concerns saying they could face hiccups on network maintenance front as scores of Chinese technicians will become unavailable if the raging epidemic continues. The telecom sector being a 24×7 service industry requires a continuous supply of network gear as per an official of Broadband India Forum (BIF). The Chinese supply chains are already facing a slowdown and non-Chinese counterparts will likely charge a stiff premium to meet the sudden spike in demand, he told ET Telecom.

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Price of Network Gear and Components Could Rise

“The price of network gear and components in India could easily rise by 25-30% as non-Chinese vendors are bound to levy a premium for meeting any sudden shortfall at the operator-end caused by any supply disruptions in China,” TV Ramachandran, president of BIF said.

Qualcomm, Nokia, Ericsson, Huawei, ZTE, Facebook, Apple, Google, Amazon, Microsoft and Intel are among the key members of this forum.

Swedish Network giant Ericsson chose to downplay the fears saying they won’t speculate on the future implications of coronavirus. The company, however, said they are closely following the latest developments in China and follow recommendations from Chinese authorities and the World Health Organisation.

Telcos though have downplayed the fears regarding spiralling costs saying European vendors will easily step in to contain the situation. They will easily meet supply shortages procuring gear from their local factories in India and also by sourcing from Asian factories outside China.