Will Indian restrictions on kit vendors hurt operators?

Will Indian restrictions on kit vendors hurt operators?

The Indian government is planning to  declare a list of ‘trusted sources’ from which companies will be asked to buy kit for telecom networks.

This move, according to India’s Economic Times, is aimed at limiting Huawei and ZTE’s involvement in the sector, and notably 5G technology rollout, after tensions on the border between the countries that have continued for some months. The new directive will become effective 180 days after approval.

However, operators will not need to replace existing gear. They can also continue with software upgrades on existing equipment as well as with existing annual maintenance contracts. 

Not long after the outbreak of border tensions between the two countries earlier this year, the Indian government ruled that companies belonging to countries sharing a border with India can no longer invest under the automatic route and that their investments need to be vetted by the Indian authorities.

It has also banned around 220 Chinese apps for what are described as national security reasons.

This move has long been on the cards, so it is unlikely any operators have been taken by surprise. However, the Economic Times did quote a number of industry executives and analysts who suggested that operators may have to spend five to ten percent more on hardware if, as seems likely, Huawei and ZTE are left out of India’s list of trusted supplier sources.

However, price hikes are expected soon from operators; this may ease the problem slightly.

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