Telecom Network Gear Might be Sourced from Chinese Vendors Upon a Condition

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Since the time border tensions between India and China increased, the government has been trying to push Chinese products and companies out of the Indian market. Supporting that move, telecom operators of the country have been actively removing the Chinese gear and equipment from their network. Bharti Airtel and Vodafone Idea (Vi) has no plans of awarding or renewing any contracts for ZTE or Huawei. The government hasn’t explicitly put the Chinese vendors in the ‘no-trust’ list yet, but it is going to release a list regarding the same information soon — more details on the story ahead.

Chinese Vendors Might be Able to Supply Up to 30% of the Network Gear

As per an ET Telecom report, once the Chinese vendors ZTE and Huawei are removed from the Indian telecom space, it would become 5% to 10% more expensive for Bharti Airtel and Vodafone Idea (Vi) to procure telecom gear from the other trust-worthy vendors.

The higher cost of procurement won’t be a burden for the operators since the upcoming tariff hike would more than cover for it. It is expected the both Bharti Airtel and Vodafone Idea can gain up to 20% higher average revenue per user (ARPU) in the financial year 2021-22 with the help of higher ARPUs.

However, it might still be possible that the government doesn’t go all guns out blazing on the Chinese vendors. There is a distinct possibility of them being able to provide up to 30% of the network gear used by the telecom operators in India.

The Department of Telecommunications (DoT) and the deputy national security advisor are going to be discussing the list of trust-worthy vendors through which Indian operators can buy their network gear or equipment. The list is expected to be out soon.

Even though the list might not mention the Chinese vendors as trust-worthy, it might still allow them to contribute up to 30% of the network gear. However, this 30% gear won’t come under the critical equipment category.

For a network to operate, there are two types of telecom gear or equipment required, one is critical and one is supplementary. The critical gear is used for the brain of the network whereas the supplementary gear is used for building and supporting the network’s functioning. Thus, the government might just allow the Indian telcos to source up to 30% of their non-critical network equipment from non-trustworthy vendors.

Such a move would let the operators keep working with ZTE and Huawei in India.

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