A consortium led by giant integrator Tech Mahindra has emerged as a bidder for an LTE upgrade project for India’s state-owned operator BSNL, after Chinese vendors were banned from the project.
The Indian government has not banned Huawei and ZTE completely from 5G networks but has indicated it will impose stricter security regulations (on top of already stringent rules introduced more than a decade ago), and is likely to keep Huawei and ZTE out of the state-controlled networks of MTNL (in Delhi and Mumbai) and BSNL (everywhere else). The approach ties in with Indian policies to stimulate usage of locally produced equipment in telecoms networks; to build up its homegrown cellular equipment business (which is extremely small); and to encourage its device makers to grow at the expense of Chinese rivals (a more realistic aim, given the growing strength of companies like Spice).
BSNL and MTNL (which are supposed to merge next year) need to modernize the equipment in about 47,000 sites to improve quality of service in their creaking networks and become 5G-ready. However, a previous tender worth about INR90bn ($1.2bn) was cancelled as a result of the new ban on Huawei or ZTE equipment being chosen. The Chinese vendors have been major suppliers to the Indian state telcos.
Now, TechM is partnering with Indian state-run manufacturer ITI, to design and make 4G and 5G equipment for the Indian market. If the group wins the BSNL contract, it will be a proving ground for the kit, and TechM will hope to be able to sell it more widely to Indian operators and even beyond.
The integrator was part of the Rakuten Mobile project to roll out an end-to-end virtualized, open network and that makes it likely that the consortium will push open technologies such as O-RAN if it wins the BSNL deal. That would see ITI providing relatively simple 4G/5G hardware which could support open interfaces and virtualized network software. TechM is an investor in Altiostar, a provider of vRAN software to Rakuten and others.
Success could transform the BSNL network, which lags far behind those of the three major MNOs – Vodafone Idea, Reliance Jio and Bharti Airtel – in quality and performance. Modernizing the network to support more open, cost-effective architectures and supply chains could, in theory at least, allow BSNL to steal a march on its rivals when they are in a challenging position because of huge adjusted gross revenue (AGR) fees to pay, and a tough competitive landscape created by the entry of the disruptive Jio.
Jio has been a pioneer of open, virtualized platforms in India and is working with partners on an inhouse implementation of 5G, which is expected to support O-RAN architectures. Together with a possible BSNL deal, its activities could greatly increase the influence of open platforms, and their suppliers, in India, and even allow for Indian manufacturers to gain market share by developing low cost, commoditized base stations.
However, there are challenges to the government’s vision of a BSNL rejuvenation and the creation of an Indian mobile equipment industry. 5G spectrum will not be awarded until next year and Bharti and Vodafone have threatened to boycott auctions if the reserve prices are not lowered. TechM has limited experience of deploying and optimizing the elements of the RAN that are not subject to open virtualization, such as Massive MIMO antennas – and BSNL’s own inhouse resources have been stretched and depleted by years of making losses and losing market share. And the big three operators, which have been lobbying to be able to make a free choice of equipment vendor, will not trust a local provider, or a new consortium, without significant proof that they can deliver the same level of price/performance as Huawei and ZTE.