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Banning Huawei may raise Indian telcos' capex on 5G: Fitch
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SME Times News Bureau | 08 Oct, 2019
If the Indian government does not allow Huawei to build a
fifth-generation (5G) network in the country, then Indian telecom
operators may have to spend more on 5G infrastructure, US Rating agency
Fitch has said in a report.
"We are of the opinion that Indian
telcos may need to invest more on 5G capex --especially on the equipment
if Huawei were banned to supply 5G equipment in India. Chinese vendors
on telecom are generally cheaper and have better technology on 5G than
their European peers", Fitch Ratings Director (Asia Pacific) Nitin Soni
told IANS in an interview.
The Chinese telecom equipment major
got a huge endorsement in the world's hottest mobile market last week
with Bharti Airtel promoter Sunil Mittal extending support to Huawei
saying the company should be allowed to help build India's 5G networks.
"My
view is they should be in play, I really feel they should be in play,"
Mittal said on Thursday at the World Economic Forum's India summit.
Bharti
Airtel is the second largest mobile network provider in India. Mittal
went to the extent of saying Huawei products are superior to its
European rivals -- Nokia and Ericsson. He said the Chinese firm's
equipment is still much more advanced.
Huawei has been a leader
in developing the next-generation 5G technology, but its recent troubles
have allowed rivals like Nokia and Ericsson to narrow the gap.
Given
the current weak financial conditions of Indian telcos owing to the
fierce competition unleashed by the Mukesh Ambani-led Reliance Jio
through cheap data tariffs and free voice calls, and the sector weighed
down by the spectrum auction loans taken for previous biddings, high
capital expenditure for 5G would only force Indian firms to pay through
their nose and further leverage their balance sheets.
Airtel's net profits have shrunk to minimum and Vodafone Idea's losses have been mounting following their merger.
India is still planning the setting up of its 5G networks, which is expected to be rolled out by next year.
The
Department of Telecom is currently working out the spectrum auction
timeline which will include 5G auctions for the first time.
Before
assigning 5G spectrum to telcom operators, a field trial will be
conducted wherein service providers will pair up with their chosen
network vendors like Samsung, Nokia or Ericsson.
This spectrum
is yet to be assigned and there is a lot of speculation whether Huawei
will be invited to participate in Indian trials.
IT Minister
Ravi Shankar Prasad told Parliament in June that Huawei was among six
companies that had submitted proposals to participate in the country's
5G trials. He said that a special committee has been appointed to
examine potential security concerns.
"Huawei, over the last 10
or 12 years, has become extremely good with their product, to a point
where I can safely say today their product is significantly superior to
Ericsson and Nokia," he had said.
Airtel has been using equipment for its 3G and 4G networks from all three companies, Mittal said.
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