'HENZ' of the Indian telecom

H-E-N-Z (Huawei, Ericsson, Nokia and ZTE) have been the major four telecom infrastructure providers in India like in several other geographies. With the recent increasing political skirmishes between US-China and then as a fallout a series of activities shaping the global economic equations, the Indian government also has decided to go ahead with 5G without the participation of Chinese vendors Huawei and ZTE. The big question remains can India build 5G without involving them?

The main reason for having 2 Tier vendor partners by the operators has been to build a balanced business case of investment-to-returns within the geography operators offer services. For instance, in Indian context, operators have been preferring going with Ericsson or Nokia for high revenue potential circles and selecting Huawei and ZTE as the vendors for other and rural markets. The state run BSNL, for instance has been deploying a lot of solutions from ZTE.

So, can the Indian telecom go ahead with the massive 5G rollout without taking support from operators like Huawei and ZTE is something that is difficult to ascertain? No doubt, Ericsson and Nokia have also become competitive with pricing and have made their solutions more relevant to countries like India in recent years; however, they could become even affordable if they are encouraged to manufacture in India. For various reasons, manufacturing in telecom has not established well beyond mobile phones in India.

To bring the reliance on Chinese vendors like Huawei and ZTE, it might be the most opportune time for India to push for manufacturing of telecom infra and equipment as we usher towards 5G. The government of India could take the manufacturing of this carrier grade infrastructure and equipment as a strategic requirement and roll out a special incentive scheme for manufacture of telecom infra and equipment in India. This could attract global players like Ericsson, Nokia, and Cisco on the other networking equipment, to start / ramp-up manufacturing in India.

5G while is ready to re-energise the entire telecom ecosystem and has already started creating the positive vibes across, can also help the telecom manufacturing grow. This can also bring a competitive edge to India as globally not many countries or regions have started their 5G talks. So, India could effectively become a supplier country to the follower countries as regards 5G.

Strengthening manufacturing is very critical for reducing and eventually eliminating dependency on the affordable supplier countries like China. If the right steps are not taken in that direction now, for the price sensitivity, our operators would be forced to re-calibrate with vendors like Huawei and ZTE in future for containing the costs and making 5G a mass technology in India.