ZTE ban may affect Indian telcos’ 4G plans
NEWDELHI: A recent US ban on ZTE Corp., which led to the Chinese network gear maker suspending major business operations, is likely to hit Indian telcos currently expanding 4G network deployments, two persons aware of the matter said.
“Almost 80% of all 4G equipment for most operators across telecom circles has been deployed by ZTE. Indian telcos are awaiting clarity on whether the ban will be lifted or not as they depend on ZTE currently for servicing of 4G equipment and spare parts, etc.,” one of the two persons cited above said, requesting anonymity. ZTE’s customers in India include telcos such as Vodafone India Ltd, Idea Cellular Ltd, Bharti Airtel Ltd, and even public sector operator Bharat Sanchar Nigam Ltd (BSNL).
BSNL recently awarded a $400 million contract to ZTE to set up base transceiver stations.
The public sector unit had awarded contracts to ZTE and Nokia in September 2017 as part of its ₹6,000 crore-plan to install 40,000 transceiver stations in the next two years to expand its mobile network.
Apart from 4G deployments, ZTE is also working with Airtel, Vodafone and Reliance Jio for 5G trials.
“It is difficult to immediately quantify the amount of material impact on Indian telcos as the ban has just been imposed but telcos will definitely be hit, given the fact that they want to aggressively expand 4G networks,” the second of the two people said on condition of anonymity.
The ban comes at a time when telecom operators have raised spending on 4G after the entry of Reliance Jio in September 2016, squeezing tariffs and hitting rivals’ revenue.
The network expansion is also essential for India as it is witnessing unprecedented consumption of data.
According to regulatory data, for October-December 2017, the average data usage per subscriber per month was 1,945MB, much higher than 878MB in October-December 2016.
ZTE, Airtel, Vodafone, Idea Cellular, Reliance Jio and BSNL did not respond to emails seeking comment.
ZTE, which competes with companies like Huawei, Nokia and Ericsson, has built a large telecom infrastructure business in the US. ZTE estimates losses of at least 20 billion yuan ($3.1 billion) due to Washington’s ban on US firms supplying the telecommunications firm, Bloomberg reported on May 23.