The Indian government says it will restrict foreign telecom vendors from taking a role in the 4G and 5G modernisation projects planned by state-owned operators BSNL and MTNL. It has said that contracts must mainly go to Indian companies.
The Times of India says this is the first such large-scale localisation move and suggests that it is driven not just by the desire to build core technologies, equipment and IPR locally but by worries about cyber security.
Communications minister Ashwini Vaishnaw has insisted that only technology which is made in India has to be used in all network upgrades to 4G and 5G.
Are the two companies ready and able to comply? And are local suppliers? We reported in late 2020 that employees of BSNL planned a strike after the operator had its 4G tender cancelled by the government due to conditions leaving out local vendors from participating. Employee groups argued at the time that there was uncertainty as to whether local vendors could fulfil BSNL’s requirements for a 4G rollout in India.
In the present day, the government has acknowledged that Indian technologies may not be superior now but has suggested that they are expected to get better with time. And local companies like Shyam VNL, HFCL, and TCS-Tejas seem to believe they can meet the indigenisation challenge.
Will this move succeed? There’s a lot riding on this, not least a recently announced revival package of over US$20 billion.