Huawei Likely to be Banned by India Over Cybersecurity Fears

It is looking increasingly bleak for Huawei as India might become the next major market to ban the telecom infra vendor. This move will come over fears that India's telecom network may be compromised.

What is it with Huawei?

The Chinese telecom equipment vendor came under much scrutiny over the past year or so after US banned it amid allegations of espionage. Notably, Canada and the EU quickly followed suit and banned the vendor, advocating European vendors such as Nokia and Ericsson.

The criticism is because it was alleged by the US that Huawei's involvement in its 5G setup can open the country to espionage from China. Therefore, sanctions imposed on the Chinese telecom giant; so much so that US companies were also banned from trading with them.

Even so, Huawei managed to retain its spot as the world's largest telecom equipment maker in 2020. Furthermore, Indian telcos are still using Chinese vendors for their network equipment. First, Airtel placed an order with Huawei worth Rs. 300 Cr. Second, Vodafone Idea is also using Chinese vendors to expand their network.

This all is happening amid Indian Government's decision to restrict vendors from non-friendly regions.

Let me just put it all together.

• First, Huawei is banned from several of the major countries. Yet it is the world's largest telecom parts vendor. How this ban affects them will get clear over the next few months.
• Second, in spite of the changes in equipment procurement by India, Indian telcos are looking to Chinese vendors. Although they have publicly stated that they will comply, it will still take time until the effect of this ban will clearly be seen in the Indian telecom market.
• Third, it will be interesting to note how much sense do Chinese vendors make in enabling 5G across the country. They are affordable and readily available, and will surely help keep the costs down.
• Fourth, does the affordability count more than the security or is it the other way around?

What if India Bans Huawei?

If India happens to ban Huawei - it is just speculation at this point - that would cause a runaway effect throughout the larger telecom industry in the country. Everything from the telcos to the end user will be affected. For now, speculation is abound and we will see what happens in the coming days.