2020-07-03

After the United States, India was exposed to stop using two Chinese companies such as Huawei equipment! What are the consequences

By ddzyx

Yesterday, the United States just added Huawei and ZTE to the list of enterprises that affected national information security. Today India followed closely and began to dissuade local telecom operators from purchasing Huawei and ZTE equipment. According to the report on July 2, according to sources, people familiar with the matter said that the Ministry of Telecommunications of India has approached its domestic well-known private enterprises regarding the use of Chinese enterprise network equipment.

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After stopping the use of Huawei and ZTE equipment, India may face three major problems?

Regarding India’s desire to stop using Huawei and ZTE equipment, important people from relevant departments in the country have said that this move is to reduce the dependence of domestic telecom operators on Chinese telecom equipment. But the sudden stop of procurement can really be as India wishes-while reducing its dependence on Chinese enterprises’ telecommunications equipment, while ensuring the normal and orderly operation of the country’s telecommunications industry? In fact, India still seems to have many problems to solve.

On the one hand, even if India has the world’s second largest telecommunications network market, attracting major telecom giants in the world to compete, it is difficult for Chinese companies to be replaced in the Indian telecommunications market. Public information shows that India’s current telecommunications market is about 1.2 trillion rupees (about 111.4 billion yuan), of which Chinese companies account for a quarter, or 27.85 billion yuan. Professionals have analyzed that if Huawei and ZTE withdraw from the Indian market, Procurement costs of local Indian companieswill 10-15%.

On the other hand, many private companies disagree with India’s tough “dissuasion”. The chairman of Airtel, India’s third-largest mobile operator, said that Huawei’s equipment is affordable and hopes that Huawei and ZTE will remain in the Indian market.

It should be noted that the reduction in competitors may also lead to supply chain problems, because the current global epidemic has not resolved, and European and American manufacturers may not have resumed normal production.

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In addition, from the perspective of the global market, Huawei and ZTE are currently the world’s leading manufacturers of mobile network equipment, and are also the few communication equipment manufacturers that can build 5G networks. One of the obstacles for India to enter the 5G era is that the price of its 5G spectrum is set too high, and the price concessions happen to be an important advantage for Huawei over European competitors.

In general, if India is determined to stop using Huawei and ZTE equipment, India’s first solution is to increase the procurement costs of local companies, the difficulty of maintaining a stable supply chain for local companies, and 5G The problem of rising construction costs.

Stopping the use of enterprise telecommunications equipment drags down the construction of 3G. Does India repeat the same mistake 10 years ago?

In fact, in recent times, India’s actions against China have continued. On June 18th, the Indian public spontaneously publicized the use of products made in China to stop using, and even smashed personal private property-TV and other large appliances; on June 20th, it was announced that it would cancel the large orders of two power plants of Chinese enterprises; June 23 On the day, announced the shelving of three projects involving Chinese companies with a value of up to 4.7 billion yuan; starting on June 25,”100%random inspection” of goods shipped from China to India; on June 29, announced the removal of 59 Chinese APPs; 7 On January 1st, it was announced that Chinese companies would no longer be allowed to participate in road construction; plus today (2nd), domestic telecommunications operators were discouraged from buying Huawei and ZTE equipment.

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From the above actions, India can find ways to reduce the domestic Chinese elements, but at present, India’s actions may not be effective. Or it may cause losses to related domestic enterprises. Taking the cancellation of two large orders for power plants and the “100%random inspection” of products from China, the results of the capital and manpower invested by the relevant local Indian companies over the past five years have disappeared; the random inspection of Chinese goods has resulted in Indian and American companies and Korean companies have suffered heavy losses, which has reduced the willingness of overseas investors to invest in India.

Return to India to restrict Chinese communication equipment vendors. As early as 2010, India mentioned that it would stop using Chinese enterprises’ telecommunications equipment and issue a “security inspection order” to restrict the purchase behavior of its domestic operators. But the ensuing consequences missed the opportunity for its domestic 3G development, making its 3G network construction one step behind. Today, standing at the juncture of 5G construction, if India insists on stopping the use of Chinese enterprise telecommunications equipment, will it repeat the same mistakes of 10 years ago?