Why Are Chinese Vendors Being Made to Sit Out the 5G Trials in India?

On Tuesday, the Government approved 13 applications for 5G trials in India. Incidentally, it did not include any Chinese telecom vendors such as Huawei and ZTE.

So, why exactly?

5G Trials in India

In December last year, DoT asked telcos to provide a list of "priority vendors", that is, a list of vendors the telcos were most likely to go with to supply 5G equipment. At that time, the telco listed their partners as follows:

1. Reliance Jio named Samsung, Nokia and Ericsson. It also plans to use its own technology.
2. Bharti Airtel and Vodafone Idea had opted for Nokia and Ericsson.
3. Vodafone Idea went with Mavenir. Mavenir is an OpenRAN technology provider and is engaged in 4G trials based on this technology with the telco in several circles in India.

There were neither Huawei, nor ZTE, or any other Chinese telecom vendor included in the list.

Geopolitical Tensions Between India and China

A few days ago, China moved troops along key positions in Ladakh, to put more pressure on Indian forces. In a time when a second wave of COVID-19 is wreaking havoc on the country and its populace, this move is downright bizarre. This aside, the Indo-China border has seen many confrontations and skirmishes since the last few years, starting with Dokhlam.

China's aggression on the borders prompted India to ban hundreds of Chinese apps and services, which included giants such as PUBG Mobile and TikTok, among others. Of course, China met this with opposition and displeasure.

In March, TRAI has added sub-clause 41.6A(iii) (a.) to the UASL Agreement, in Security Conditions. It starts with:

The Government via the Designated Authority will have the right to impose conditions on procurement of Telecommunications Equipment on grounds of Defence of India, or matter directly or indirectly related thereto, for national security.

At the time, it looked like this amendment will do away with Chinese telecom vendors. However, soon thereafter, news filtered in that Chinese telecom vendors may just make it to India's list of trusted vendors after all.

This sparked yet more controversy and a will they, won't they situation. So far, NCSC is yet to submit its list of trusted vendors, so it is all up for speculation.

However, in terms of magnitude, this move far exceeds banning a bunch of Chinese apps.

US Applauds India's Decision to Exclude China from 5G Trials

Speaking on the matter, House Foreign Affairs Committee Lead Republican and China Task Force Chairman Michael McCaul said on Wednesday, "India's decision to exclude Huawei and ZTE from its 5G trials is good news for the people of India and the world". He further added that CCP can make Chinese companies work for the party, which poses serious risk of espionage.

Congressman Mike Waltz also thanked India for its decision. "Thank you to India for denying the inclusion of CCP-run Huawei in their telecommunications," he said.

"As the world's largest democracy, India will be a critical ally in confronting China and securing our supply chains," Mr Waltz said.

"China Expresses Concern" is Just China being China

Chinese embassy spokesperson, Wang Xiaojian expressed “concern and regret" that Chinese vendors were excluded out of 5G Trials. Of course, this is one of the most China things China can do.

The statement further read, "to exclude Chinese telecommunications companies from the trials will not only harm their legitimate rights and interests, but also hinder the improvement of the Indian business environment, which is not conducive to the innovation and development of related Indian industries".

Global Times also cited Xiang Ligang, who is director-general at Information Consumption Alliance, who claimed that excluding Huawei and ZTE will "increase the costs by one-third and the construction period by two to three years".

There might be merit to that claim, however. Only Reliance Jio has managed to build its network without Chinese vendors, among Indian telcos. As much as 30% of all of Bharti Airtel's network runs on Huawei equipment; for Vodafone Idea this figure goes to 40%.

Also, almost a quarter of all telecom equipment comes from China. Banning Huawei and ZTE will cause around 15-20% increase in procurement costs.

Cybersecurity, Import Dependence and Make in India

First, cybersecurity is the most dangerous threat Chinese telecom vendors can pose. As pointed out by Michael McCaul, Chinese companies have to work with CCP if asked to do so. Therefore, there is no telling when China decides to launch a cyberattack and cripple India's telecom sector. US imposed bans on Chinese telecom vendors on these grounds, among others.

In 2011 and 2012, Vodafone found backdoors installed in the equipment of its Italian business. These secret backdoors can give network access to spies and states, to devastating effect.

Second, Indian telcos are getting complacent with lower costs of Chinese equipment. Bharti Airtel and Vodafone Idea should follow Jio's lead and either go with European tech, or develop their own. If the last bit is too difficult, go with local makers.

This complacency will develop into dependence, and India might face the same situation with Telecom equipment as the US is facing with semiconductor chips.

India's PLI scheme in Telecom Equipment is a great step in the right direction. We will have to wait and see if it offsets the increased costs that come with excluding Chinese vendors completely.

Wrap Up

It is certain that leaving out Chinese vendors from the 5G Trials is a win for India. India has one of the largest networks in the world, with a user base dwarfing the continents of Africa, Europe, the Americas and Oceania. That is why India can't afford to have any shortcomings, at least not in terms of security.

To answer the titular question; Chinese vendor will sit this out because they can't guarantee safety and security of India's telecom network.