India Could Be Key in U.S. Effort to Thwart Huawei on 5G -- Journal Report
10 April 2020 - 3:18AM
Dow Jones News
By Eric Bellman
NEW DELHI -- When President Donald Trump visited India in
February, he was expected to try to pressure Prime Minister
Narendra Modi to join the U.S. in banning use of equipment from
Huawei Technologies Co. in the building of India's next-generation
5G networks.
Mr. Trump said they discussed the importance of building secure
5G systems. Mr. Modi's office wouldn't disclose what was said.
But the world's largest democracy is giving signs that it won't
be pressured into limiting its options. India is already allowing
Chinese technology companies Huawei and ZTE Corp. to participate in
5G trials and was still deciding whether restrictions are needed,
External Affairs Minister Subrahmanyam Jaishankar told The Wall
Street Journal back in January.
"We have agreed to trials for everybody, but that's a
preliminary step," Mr. Jaishankar said. "I would say, I don't think
it's a subject for purely politics."
India is one of the world's largest and most competitive
telecommunications markets -- and one with some of the most room to
grow. While expansion in most mature telecommunications markets has
slowed, India will be adding around 171 million new wireless
internet subscribers in the next five years, according to estimates
from GSMA Intelligence. That is twice the number expected to be
added in China and the U.S. combined.
However, large numbers of consumers here cannot afford better
phones or faster networks than they currently have, which is one
reason much of India is still stuck in a 2G world. In 2018, 43% of
Indians still used 2G phones, GSMA says, while 39% had graduated to
4G. Tight budgets also have slowed upgrades of networks and other
technology by providers here.
Those worried about Huawei argue that it has to comply with
demands of the authoritarian Chinese government, making it a
potential tool for espionage. Huawei has repeatedly said such
concerns are unfounded. Its founder has said his company has never
spied for the Chinese government and won't in the future.
Policy makers and phone companies in India, meanwhile, aren't
persuaded so far that using Huawei's equipment presents a security
threat for India's telecom networks. Some powerful local voices
argue that the risk is small and is far outweighed by Huawei's
competitive prices and capabilities.
"Operators [in India] have always supported nondiscriminatory,
technology-neutral selection criteria by government," says Rajan
Mathews, director of the Cellular Operators Association of India.
"Operators see no specific security concerns with the use of
Chinese equipment in their networks."
India is just starting to test 5G systems, and the size of its
1.3-billion-person market means its eventual decision could make or
break the Trump administration's campaign to prevent Huawei's
dominance of 5G around the world. Pressure from the U.S. to pick a
side presents a painful dilemma not just for India but also for
other developing countries. As developing nations begin to update
their internet infrastructures, Huawei is a potentially critical
supplier and financer of equipment at competitive prices. Bowing to
U.S. demands to shun the company could mean falling behind
technologically or paying more for non-Chinese gear.
India is scheduled to start auctioning its 5G rights this year
-- a necessary step before network construction can begin. In the
meantime, telecommunications companies want to know how much
freedom they will have, once the rights have been purchased, to buy
equipment, analysts say. With 5G likely to cost more than $30
billion to install in India, letting Huawei compete could
significantly lower projected costs and allow the network to reach
further into India's rural hinterlands where most of the country
lives. Around 20% of the equipment that makes up India's current
nationwide cellular network is from Chinese companies, including
Huawei.
Huawei's hopes for India were apparent at one of the largest
industry events held in New Delhi last year, the India Mobile
Congress. Huawei was one of the main sponsors of the event and had
the largest booths demonstrating how 5G could be used in India for
everything from smart cities and surveillance to speeding up
airport security and virtual-reality teaching.
"We hope to play a key role in bringing the latest and the best
solutions to make India 5G-ready...in the domains of education,
agriculture, health care, etc.," Jay Chen, chief executive of
Huawei India, says. "We have our full confidence in Indian
government and industry to partner with the best technology for
India's own long-term benefit."
Rajesh Roy contributed to this article. Mr. Bellman is deputy
bureau chief in the New Delhi bureau of The Wall Street Journal.
They can be reached at rajesh.roy@wsj.com and
eric.bellman@wsj.com.
(END) Dow Jones Newswires
April 09, 2020 13:03 ET (17:03 GMT)
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