Indian telcos, rather as we expected, have called for China’s Huawei and ZTE to be included in the country’s 5G trials ahead of impending spectrum auctions that had been postponed further as a result of the ongoing Covid-19 pandemic.
The operators have written to India’s Department of Telecommunications (DoT) urging it to scrap restrictions on 5G lab trials, imposed on participants from countries sharing a land border with the country. This is code for China, given that the other six countries on that list – Afghanistan, Pakistan, Bhutan, Nepal, Myanmar and Bangladesh – are not in the frame. The letter, sent via Cellular Operators Association of India (COAI), implied that India’s 5G deployment program, already lagging those of most peer countries, because of spectrum delays and factors, would fall further behind were the vendor restrictions to be retained.
Indian operators, like many elsewhere, are also fearful of being too dependent on an even smaller number of critical infrastructure vendors. Although the country has named Ericsson, Nokia, Samsung, Cisco and NEC on the list of potential trial participants, only the first two currently have a full array of 5G infrastructure components embracing RAN and core.
Counterparts in some European countries, and of course the USA, have accepted they must deploy 5G without Huawei in particular and look to Open RAN, in the longer term, to broaden diversity of supply. Europe’s ‘big four’ – Deutsche Telekom, Telefónica, Vodafone and Orange – published a joint memorandum of understanding in January, pledging themselves to development and deployment of the Open RAN concept.
Vodafone had two months earlier signaled its commitment by promising to adopt use Open RAN at around rural 2,600 base stations in the UK served by Huawei, just over one-third of the operator’s installed base of that vendor’s equipment in the country.
Vodafone Idea is one of the operators in India urging for inclusion of Huawei and ZTE in 5G trials, but many operators do not see India yet being ready to embrace O-RAN in full, and believe that the country must include at least some equipment from Huawei to ensure that 5G deployment picks up speed and closes the gap on other leading technological nations, without straining finances.
Vodafone Idea had in fact made its intentions clear two years earlier, in November 2018, when it signed contracts for supply of network equipment with both Huawei and ZTE, while spurning Nokia and Ericsson, citing significant cost savings.
All parties are agreed though that the current priority for Indian cellular lies with shoring up the country’s 4G infrastructure. It is after all a huge 4G auction that is coming up this month, being held over up to two months with about 2,250 MHz of spectrum, spanning the low and midband, up for grabs. This will be in the 700 MHz, 800 MHz, 900 MHz, 1.8 GHz, 2.1 GHz, 2.3 GHz and 2.5 GHz bands. The first 5G auction is slated for later in 2021 in the 3.3 GHz and 3.6 GHz bands.
Similarly, 4G rather than 5G has been the focus of spectrum refarming so far. In November, Bharti Airtel started redeploying its spectrum in the 900 MHz band, previously used for basic 2G services, for 4G across 10 areas for indoor coverage in public areas of major cities.
In the longer term there is now optimism by Indian operators that the tide is flowing towards open procurement, favoring homegrown infrastructure providers as and when that becomes possible (see separate item). The ‘Make in India’ initiative, as it relates to the 5G ecosystem, is to some extent a consciousness raising exercise to gather support and commitment from indigenous vendors across the spectrum of relevant technologies.
But if India does decide for now to admit the two Chinese vendors it would be the second U-turn in six months. At first India rebuffed pressure from the US government to cut the Chinese out of its core infrastructure and in December 2019 allowed Huawei to participate in its 5G trials.
But then in August 2020 the government appeared to change its mind and while not issuing any direct ban, instructed operators to start favoring domestic suppliers where possible. This was interpreted by some as finally bowing to US pressure, but it had much more to do with regional geopolitics at a time of border skirmishes with China that led to 20 Indian troops being killed in one local brawl high in the Himalayas.
The shift in government stance then was partly intended to signal anger and exert some pressure on China to behave less aggressively over some historically disputed border areas if it wanted to have any involvement in its 5G infrastructure.
It is also true that, like some other countries, India did share US concerns over Huawei’s connections to the Chinese state and its potential to dominate the regional and the global markets for what is becoming a critical communications technology for underpinning many other industries. This fear takes precedence over even national security concerns relating to Huawei infrastructure itself, which are often regarded as a smokescreen obscuring the real underlying issue, which the US administration could and should have expressed more clearly.
What many operators, including India’s, now want to see is a handful of other leading vendors emerging to challenge Huawei, Ericsson, Nokia and to an extent Samsung, and becoming strong and stable enough to be entrusted with a significant part of their infrastructure.