‘Banning Huawei may raise Indian telcos' capex on 5G’

If the Indian government does not allow Huawei to build a fifth-generation (5G) network in the country, then Indian telecom operators may have to spend more on 5G infrastructure, US Rating agency Fitch has said.

"We are of the opinion that Indian telcos may need to invest more on 5G capex --especially on the equipment if Huawei were banned to supply 5G equipment in India. Chinese vendors on telecom are generally cheaper and have better technology on 5G than their European peers", Fitch Ratings Director (Asia Pacific) Nitin Soni said.

The Chinese telecom equipment major got a huge endorsement in the world's hottest mobile market last week with Bharti Airtel promoter Sunil Mittal extending support to Huawei saying the company should be allowed to help build India's 5G networks.

"My view is they should be in play, I really feel they should be in play," Mittal said at the World Economic Forum's India summit.

Bharti Airtel is the second largest mobile network provider in India. Mittal went to the extent of saying Huawei products are superior to its European rivals -Nokia and Ericsson. He said the Chinese firm's equipment is still much more advanced.

Huawei has been a leader in developing the next-generation 5G technology, but its recent troubles have allowed rivals like Nokia and Ericsson to narrow the gap.

Given the current weak financial conditions of Indian telcos owing to the fierce competition unleashed by the Mukesh Ambani-led Reliance Jio through cheap data tariffs and free voice calls, and the sector weighed down by the spectrum auction loans taken for previous biddings, high capital expenditure for 5G would only force Indian firms to pay through their nose and further leverage their balance sheets.