The aftermath of the border skirmish between India and China in Ladakh is continuing to have an effect on telecommunications, with Chinese app vendors coming under attack from Indian consumers and uncertainty being expressed about operator contracts with Huawei and ZTE.
Mobile apps supported by Chinese investment – Paytm, Ola, Zomato, MakeMyTrip and others – are experiencing hostile comments from Indian contributors to review boards on Google Play and, in some cases being uninstalled by end users. There was in fact a free app called Remove China Apps available on Google Play until it was itself removed from the store.
One brand that may suffer more than most, not least due to its high visibility, is TikTok, and owner ByteDance’s India-focused app Helo. TikTok has been under attack for some while over alleged anti-India content, censorship, inappropriate videos and unacknowledged payment for content, along with owner ByteDance’s close relationship with the Chinese government. This all began a while before the Ladakh controversy, though that cannot have helped.
On the smartphone side, which is dominated by Chinese-backed names like Xiaomi, Vivo and Oppo, things may be less problematic for Chinese companies. Such brands together have a market share of close to three quarters. They also focus on – and dominate – the affordable smartphone market, so a consumer rush for other brands is unlikely. However, online retailer Flipkart is planning a summer sale this week, which should indicate whether, and how, the smartphone market is going to be affected.
However, if anti-Chinese sentiment spreads to network kit suppliers, things could get very difficult – and not just for Chinese vendors. Vodafone Idea and Bharti Airtel, for instance, could have to find $600-650 million and $300 million respectively to pay Huawei and ZTE if the Indian government decided that existing equipment contracts had to be cancelled.
Both operators could also face potential penalties in case of premature cancellation of existing managed services and asset maintenance contracts with the two Chinese vendors. But the situation could get very serious if ZTE and Huawei chose to push for early settlement of their dues – especially given Vodafone Idea’s financial difficulties after last year’s Supreme Court decision landed it with around $7billion of outstanding AGR dues to pay.