INDIA’S DECISION on whether to allow Huawei in upcoming 5G trials could be negatively influenced by the aggressive posturing by China in recent weeks, which has heightened the possibility that an all-clear for the world’s largest telecommunications equipment maker could be seen as New Delhi “pandering” to threats, a senior government official told The Indian Express.
India is set to conduct its first field trials to test the real-world viability of 5G networks in the coming months. In May, the Chinese commerce ministry had stated that Beijing was preparing an “unreliable entity list” that will include organisations that block supplies to Chinese companies for non-commercial reasons or otherwise damage their interests. More recently, late last month, China is learnt to have told the Indian government that blocking Huawei could result in consequences for Indian companies operating in China.
“Now that there are warnings from China (about reverse sanctions), the Indian government is also expected to adopt a different posture. If this was done through backdoor channels in the normal (diplomatic) course, it would have been better for Huawei. If the government concedes, it will be seen as pandering to Chinese (threats),” the official said, adding that ensuring digital security was a key objective of the government and was not a matter of open trade policy.
5G is the next generation cellular technology with download speeds stated to be 10 to 100 times faster than the current 4G LTE networks. The 5G networking standard is seen as critical because it can support the next generation of mobile devices, as well as applications such as driverless cars and IoT (internet of things).
If Huawei does not get a clearance, it will lag 5G rivals such as Finland’s Nokia and Sweden’s Ericsson in the Indian telecom sector, one of the fastest-growing markets in the world that is projected to expand over 10 per cent to $103.9 billion by 2020, according to a report by Market Research Store.
During April-February period of 2016-17, Indian telecom equipment imports were $15.82 billion. For India, a restriction on the Chinese company would have cost implications, given that Huawei gear is deemed to be cheaper and more cost efficient by domestic telecom companies.
While a government panel on 5G technology is learnt to have been split on the issue of allowing Huawei’s participation in the upcoming trials, the general view till earlier this month was that more safeguards would be needed before there being any chance of Huawei getting a go-ahead.
This includes verifiable guarantees that there will be “no back door” into its equipment that could threaten national security — in technology parlance, “back door” refers to arrangement with governments or with any third party to share customers’ data in an unauthorised manner with malafide intentions.
Broadly, India has three options on the issue — an outright ban on Huawei; a middle line that could involve regulating the use of gear or implementing strong testing and regulatory oversight; and, an all-clear to the Shenzen-based telecoms major.
The Chinese have launched a diplomatic push to ensure that they get a carte blanche while the US is exerting pressure on countries, including India, to completely ban Huawei from 5G trials. Some countries, including Australia and New Zealand, have banned Huawei from 5G trials, while in countries like the UK, BT has said it would phase out Huawei tech from its existing 4G network by 2021, and not use it in 5G core networks.
On Wednesday, Romanian President Klaus Iohannis and US President Donald Trump signed a joint-statement that could lead to exclusion of Huawei from the European country’s future 5G network.
The US has effectively banned Huawei from selling its products after a 2012 congressional report stated that Huawei could be a security risk. Specifically, the US has alleged that deploying Huawei equipment posed risk because of back-door installations in its systems that could leak data. The US has also claimed that Huawei’s owners have close links with the Chinese military.
The treatment of Huawei has become a massive reason for further straining the fraught diplomatic relations between the US and China. “China is now blackmailing India into using Huawei for its 5G infrastructure,” influential US Congressman Jim Banks was reported as having said on August 7.
To address the charge of espionage, Huawei India has stated that it was ready to sign a “no back-door” agreement with the Indian government. “All the networks are now being maintained and controlled by equipment providers. The level of outsourcing by telecom operators has become very high and that has diminished our strategic control. It has become a strategic issue, not a Huawei issue. We need to promote domestic manufacturing of core network equipment, only then can we protect our long-term interest, otherwise we are vulnerable,” the government official said.
Even though Huawei equipment is deemed to be cheaper and more cost efficient by telecom companies, preparations being made by Indian operators for their respective 5G networks indicate that they are accounting for an absence of Huawei equipment in core equipment.
An industry analysis for European telecom firms conducted by GSM Association has showed that banning of Chinese equipment vendors would add $62 billion to cost of 5G networks in Europe.
Earlier this month, Bharti Airtel’s India & South Asia CEO Gopal Vittal had indicated that security concerns around 5G adoption should be dealt with, even if it delayed the rollout of the technology by 12-18 months. This is despite the fact that a ban on Huawei could mean additional financial burden for the Indian telecom industry that is reeling under an aggregate debt of more than Rs 4 lakh crore.