India has tweaked its telecom licensing rules to make it harder for Chinese vendors to sell to local operators ahead of a much-awaited 5G auction later this year.
The Department of Telecommunications (DoT) announced on Monday that telecom licences will require operators to purchase equipment from so-called “trusted sources” for both network expansion and upgrade projects.
By adding the word “expansion” to the licence conditions, the modifications effectively closed a loophole that industry sources say were exploited by operators to sign up Chinese original equipment manufacturers (OEMs), including Huawei and ZTE, as gear partners.
India has started the groundwork for 5G services, which according to the Communications and Electronics & Information Technology Ministry could be rolled out early next year.
Testing 5G Networks
The airwave spectrum for offering the 5G services is slated to happen in the next few months, it says. Leading telecom companies including Airtel, Reliance Jio and Vi are testing their 5G networks.
The change also makes selling gear more difficult for smaller local vendors, says Shiv Putcha, principal analyst at Delhi-based Mandala Insights, a boutique telecom analyst firm.
“Outsiders, barring the government, have no idea which equipment could be termed as coming from “reliable sources,” he said. For the operators to move away from Chinese equipment would certainly involve higher costs and this is bad news for them,” said Mahesh Uppal, the founder of Delhi-based Com First, a telecom consultancy firm.
By Indrajit Basu