The growing cases of deadly Corona Virus seem to be increasing troubles for multiple nations across the world. Countries like the USA and Italy seem to be in crisis mode already, and some effect of it has already touched the borders of India as fears of the virus spread grow. This is likely to affect the telecom business as well. Especially for all the vendors that supply telecom equipment to the telecom operators in India, the situation seems to be a little bleak for these companies. Vodafone Idea and Bharti Airtel have been previously known to rely more on the Chinese vendors like ZTE and Huawei, whereas Reliance Jio has just relied on Samsung, the South Korean giant for its telecom equipment. As per a new report by ET Telecom, for Reliance Jio, the situation might change soon.
Reliance Jio Might Seek Equipment from Other Vendors
Rohan Dhamija, partner & head of India & Middle East at Analysys Mason remarked that “the spread of Corona Virus to South Korea might create some future restrictions for Reliance Jio in the matter of telecom gear procurement. It is because of this that Reliance Jio might consider a multi-vendor strategy which will serve well for the telecom company in case Samsung falls back on some of its orders”. This is also to be noted that Reliance Jio happens to be adding consumers to its subscriber base every month which means that there is still growing demand for data services and hence also demand telecom equipment as well.
Incumbents Also Likely to be Affected
The effect might also stretch to other telecom companies like Vodafone Idea, and Bharti Airtel, as well as these, are the companies getting their telecom equipment from Chinese vendors like Huawei and ZTE. With China being worst affected by the global deadly virus threats, this means that the incumbent telcos might also have to look for a multi-vendor model which will increase their procurement costs and weighing down their capex. As per the analysts, the prices might increase by 25% for these companies. On this matter, COAI Director General, Rajan Matthews said that there is no worry on the gear front yet as the telecom companies are more involved in the AGR dues crisis.