Vodafone Idea and Huawei extend 4G deal ahead of new Indian rules

Vodafone Idea and Huawei extend 4G deal ahead of new Indian rules

Vodafone Idea signed an agreement with Huawei to expand its 4G network shortly ahead of the Indian government’s March announcement that operators must procure all equipment from trusted providers.

The Economic Times reported that the agreement is worth between INR4 billion ($54.7 million) and INR4.5 billion, and covers planned extensions of Vodafone Idea (Vi)’s 4G network as well as upgrades to its transport network. The paper noted that Vi is Huawei’s biggest customer in India; however, it is in debt to the vendor to the tune of around INR8.5 billion.

The news has come to light as India prepares to enforce the new procurement rules on 15th June, which are at least in part aimed at limiting the role of Chinese vendors in the deployment of India’s 5G networks, with the government claiming that the use of Chinese network equipment poses a national security risk.

Last month, Chinese vendors Huawei and ZTE were left off the Indian government’s list of approved suppliers for network equipment as Indian operators prepare for 5G trials.

The new rules are already having an impact, with Bharti Airtel last year shunning Chinese vendors in favour of Nokia for a US$1 billion RAN contract. The operator also extended an existing deal with Ericsson for the supply of 5G-capable radio and transport gear.

Market leader Reliance Jio selected Samsung to provide its 4G RAN equipment, and has stuck with the vendor as it applies to run 5G trials. However, it is also planning to develop domestically produced 4G and 5G network equipment as it seeks to reduce both its costs and its dependence on imports.