Two major telecom operators of India, Vodafone Idea and Bharti Airtel are in exploratory talks with the Korean telecom equipment manufacturer, Samsung, as Huawei's future seems to be surrounded with uncertainty, reported an ET Telecom report. Notably, Huawei has been in trouble lately and has been banned in the USA. A person familiar with the strategies of the two companies said that the two telecom operators don't want to be stuck with only two vendors – Ericsson and Nokia and since there is uncertainty surrounding Huawei's fate, going into talks with Samsung seems like the right approach.
Divide in DoT Regarding Involvement of Huawei
Another person aware of the matter said that Samsung is already starting to get feelers for 4G and 5G technology from telcos in India. The source said, "There are feelers on 5G. But, there are many steps required, including trials in India since commercial deployment has some time to start in the country. Even on 4G, Samsung is getting feelers from the two telcos."
It is worth noting that both Vodafone Idea and Bharti Airtel operate in a multi-vendor market and Vodafone Idea's exposure to the Chinese vendors has increased after it awarded Huawei the contract for deploying 4G equipment in seven circles. Even Bharti Airtel uses Huawei's equipment in a few circles, whereas Samsung is the vendor which only operates with Reliance Jio in the country. There is also the question of whether or not Huawei will be allowed to participate in the 5G trials in the country and then later on in the 5G commercial launch. New Telecom Minister, Ravi Shankar Prasad said last week, "There are security issues…it is not only a matter of technology, where their participation in 5G is concerned."
The Department of Telecommunications has been divided on the issue of counting in Huawei for the 5G trials given the Sino-Indian diplomatic relations. Some people in the department believe that even European vendors like Nokia and Ericsson can pose a threat to security, and these people believe that Huawei should be trusted for the 5G trials. Whereas, there is another group of people which believes that Chinese vendors are a confirmed threat to the security as they are bound by Chinese laws and thus bound to share information with the Chinese government.
Samsung's Increasing Prominence in World Equipment Market
Huawei in its statement said, "...we are optimistic of the future, including all road maps and plans for India, which includes 5G trials and commercial rollouts in due course. We firmly believe that as a front runner in 5G, Huawei's participation will be hugely beneficial for the safer, faster and smarter deployment of this technology in India." The vendor also added that it hopes for an independent and informed decision on the DoT's part, thus creating a level playing field for all the vendors.
The source also said that Samsung is attracting a lot of traction in 5G because of the scale it is operating in even though it is not in many countries. Another anonymous analyst said that European vendors could try controlling the prices in the market in the absence of Huawei, where Samsung could bring a balance. It is worth noting that Samsung currently holds just 3% of the global telecom infrastructure market compared with 28% for Huawei, according to market tracker Dell' Oro Group. Now, Samsung's clients also include US telcos firms AT&T Inc, Verizon Communications Inc and Sprint Corp for 5G technology in addition to South Korean and Japanese telcos.