India cautious of Huawei’s participation in 5G rollout
Australia became the third country after US and UK to have officially raised concern against Huawei and taken some sort of action.
Australian law wouldn’t be able to guarantee security of the network”.
Australia became the third country after US and UK who have officially raised concern against Huawei and taken some sort of action. All these three countries have in the past expressed their concerns about the massive cyber attacks targeting them—these attacks had originated from China. Earlier this week, a report prepared by the Ministry of Electronics and Information Technology, headed by Ravi Shankar Prasad, had stated that the maximum number of cyber attacks on official Indian websites had been coming from China, US and Russia. The report was sent to the National Security Council Secretariat (NSCS), a body which advises the Prime Minister’s Office on matters of national security and strategic interest.
The report, prepared by the Indian Computer Emergency Response Team (CERT-In), which comes under the ministry, analysed cyber attacks from April-June 2018. According to the report, “The cyber attacks from China made up 35% of the total number of cyber attacks on official Indian websites, followed by US (17%), Russia (15%), Pakistan (9%), Canada (7%) and Germany (5%)”.
Huawei, on its part, has repeatedly dismissed the security concerns, insisting that it is a private company owned by employees and does not have any government shareholders. Industry insiders tracking the development said that the company was in the advanced stage of talks with the department of telecom regarding the roll out of 5G in India and its officials were regularly meeting government representatives. Sources said a meeting was held last week, and that the Australian government’s decision was not going to impact its operations in India.
This is not the first time that Huawei has come under scrutiny from Australia. In 2012, it was blocked from bidding for laying the network for Australian bank.
The recent order has not just banned Huawei but it has also proscribed another Chinese tech firm ZTE from providing 5G technology. ZTE’s controlling shareholder is Shenzhen Zhongxingxin Telecommunications Equipment, which is a Chinese state-owned corporation.
Officials in the Indian security establishment recalled that in 2009 the then UPA government had barred BSNL from procuring gear from Huawei and ZTE, citing apprehension that these could be embedded with a spy gear. However, the ban was lifted within a few months and in August 2010, a couple of Indian private telecom companies were given permission to buy equipment from the two Chinese companies. Officials believe that more than 60% of the software and hardware related to telecom being used in India, including by the state managed BSNL, is either manufactured by Huawei or by ZTE.
A team of officials from Department of Telecom (DoT) are slated to go to China and to Huawei’s office in November this year to train themselves for the upcoming “challenges”. A similar trip was taken up by the ministry officials in October last year, sources said.
The training course is being organised by Thailand-based intergovernmental organisation, Asia-Pacific Telecommunity (APT), which is supported massively by telecom giants. * The Australian government’s decision to block Huawei from Australia’s 5G market is politically motivated, not the result of a fact-based, transparent, or equitable decision-making process. It is not aligned with the long-term interests of the Australian people, and denies Australian businesses and consumers the right to choose from the best communications technology available. A non-competitive market will raise the cost of network construction and [will] have lasting effects on Australia’s transition to a digital economy. In the end, everyday businesses and consumers are the ones who will suffer the most from the government’s actions. * Huawei is one of the core developers behind 5G. The Australian government recognizes the massive benefits that 5G technology will bring to Australia’s economy, and yet it has restricted the use of Huawei’s technology Innovation works because innovators are rewarded for their work, but the government has effectively denied Huawei a right to compete for a return on our investment. * Interpreting Chinese law should be left to qualified and impartial legal experts. Huawei has presented the Australian government with an independent, third-party expert analysis of the Chinese laws in question: Chinese law does not grant government the authority to compel telecommunications firms to install backdoors or listening devices, or engage in any behavior that might compromise the telecommunications equipment of other nations. A mistaken and narrow understanding of Chinese law should not serve as the basis for concerns about Huawei’s business. Huawei has never been asked to engage in intelligence work on behalf of any government. * There is no fundamental difference between 5G and 4G network architecture; the core networks and access networks are still separated. Moreover, 5G has stronger guarantees around privacy and security protection than 3G and 4G. We urge the government to take an objective and fact-based approach to security issues, and work together on effective long-term solutions. Open dialogue, joint innovation, and close collaboration are essential to the ongoing development of the telecommunications industry. * For any country, fair and robust market competition is essential to strong economic growth. The Australian government’s actions undermine the principles of competition and non-discrimination in fair trade. The government has not issued any specific concerns about Huawei’s governance, security, or suitability to safely and securely conduct business in Australia, so we’ve been given nothing to respond to. We will continue to engage with the Australian government, and in accordance with Australian law and relevant international conventions, we will take all possible measures to protect our legal rights and interests. Carbon black is a pure elementary carbon in the form of a black powder produced by thermal decomposition of liquid and gaseous hydrocarbons. The largest application of carbon black is as a reinforcing agent for the manufacture of tyres. Its unique properties make it useful for pigmentation and as a conductive agent. The carbon black business segmentation is divided into rubber carbon black and non-rubber carbon black. Tyre demand in India is growing at a rapid pace and has outperformed the growth of automobile production in the last five years on the back of higher demand from the replacement market. India and Thailand are witnessing highest investments in the tyre segment within the Asia Pacific region excluding China. Utilisation levels are expected to go up as demand is outstripping supply. Phillips Carbon Black Ltd (PCBL) is a part of the Kolkata headquartered RP-Sanjiv Goenka Group and is the largest carbon black producer in the country. It was set up in collaboration with the US company, Phillips Petroleum in the year 1962. The company started production with 14,000 metric tonnes of carbon black at Durgapur. Currently, it has a production capacity of over 515,000 metric tonnes per annum along with 76 MW of green power. PCBL has a wide market presence across 30 countries, providing a complete portfolio of products to meet the specific end requirement of the paint, ink, rubber and plastic industry. It is the first company in the world to receive carbon credits. It has four manufacturing facilities at Vadodara, Durgapur, Kochi and Mundra. Since gas is the byproduct of carbon black production, it has harnessed the gas to generate electricity. This has been done by setting up captive power plants at each of the four factories, thus creating a sustainable green movement. The company reported an excellent set of Q1FY19 financial results supported by highest ever quarterly net sales of Rs 781 crore and higher net profit of Rs 97.54 crore. The bottom line was driven by shift in product mix and continuous improvement across all functions. The outlook for PCBL remains quite strong on the back of capacity expansion, robust product demand and sound financials. The company is undertaking a 56,000 tonne capacity expansion at Mundra, which is expected to be completed within the next six months. Simultaneously, a 32,000-tonne capacity expansion at Palej is progressing satisfactorily and is expected to be completed within the next one year. All this bodes well for the company to report robust top and bottom line numbers for the next six quarters. Incidentally, last year, we had recommended this stock around Rs 200 when it was at Rs 10 face value. It had zoomed to over Rs 1,200 and now quotes at Rs 240 but on the face value of Rs 2. Investors can enter at the current market value, as it is good fundamental buy for super returns over the next 18 months. Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.