Analyst Angle: BWA in India: WiMAX, TD-LTE and things in the rearview mirror
Flap over security concerns could hobble Huawei, ZTE growth in India
May 5 2010 - 6:59 pm ET | By Shiv K. Bakhshi, Ph. D. | RCR Wireless News
excerpts from the article:
"Flap over Chinese vendors
First, some background: Citing security concerns, India has blocked imports of telecom equipment from Chinese vendors for an indefinite period. While no formal ban has been imposed, Indian operators have been advised to seek security clearance for the equipment they may be procuring for their network operations.
The security clearance requirement is an existing licensing condition that the government has invoked to throttle the import of Chinese equipment into the country.
India is the second-largest market outside China for both Huawei and ZTE and the Chinese vendors are, understandably, scrambling to gain clarity and allay the government's security concerns. The implications of the ban on existing infrastructure contracts are unclear, except that network deployment plans of some operators are being thrown out of whack.
Will hurt domestic industry too
Sources in government and industry suggest that the flap over security might persist for several months. If that happens, it would effectively hobble Huawei's and ZTE's growth opportunities in India, since both Huawei and ZTE might get excluded from the first round of contracts awarded for 3G and BWA. Western vendors would stand to gain, by contrast.
The ban on Chinese telecom infrastructure imports may, actually, hurt the entire Indian industry. The reduction in competition, especially elimination of aggressive competitors from the equation, may raise the bill for all telcos. While the large incumbent operators may still be able to extract favorable terms from the remaining vendors, if only because of historical relationships, the smaller operators are sure to see their bills rise.
But beyond this, the ban on Chinese vendors might also adversely affect WIMAX prospects in India. The Chinese vendors, much more than their major western counterparts, seemed inclined to pursue WiMAX contracts. In addition to providing the technology, they would likely have offered viable financing terms to help new WiMAX players roll out the networks.
If these vendors are forced to sit out the round of infrastructure contracts that are likely to follow the current auctions, WiMAX may have lost strong allies that could have helped their cause in India. There is always Samsung and the smaller infrastructure vendors, of course. "
Analyst Angle: BWA in India: WiMAX, TD-LTE and things in the rearview mirror - RCR Wireless News
