Boycott Chinese products: Huawei may lose Airtel’s Tamil Nadu 4G circle to Ericsson

New Delhi: Bharti Airtel is likely to replace Huawei with Sweden’s Ericsson for 4G network expansion and modernisation in the Rest of Tamil Nadu (RoTN) circle, said people familiar with the matter, as the Sunil Mittal-led telco takes gradual steps towards reducing dependence on the Chinese gear maker.“Without RoTN, Huawei will just have two Airtel circles. Airtel has already stopped giving packet core orders to Huawei for any capacity expansion,” said a person on condition of anonymity. “All such orders have gone to Ericsson.”Ericsson, which is the second-largest vendor for Airtel, declined to comment. Queries sent to Huawei remained unanswered. “Airtel has strong relationships with several partners. These partners work across all our domains — radio, core and transport,” said a Bharti Airtel spokesperson in a statement to ET.Huawei had increased its involvement with the Airtel network in 2017, when it got Rajasthan and Uttar Pradesh (West) circles on top of Karnataka and RoTN. But it is now likely to be back to two. Airtel, with more than 284 million users, swapped Huawei gear with that of Ericsson in the Rajasthan circle in late 2019. That came as pressure on Huawei was increasing, mainly from the US, for its alleged proximity to the Chinese government, leading to snooping concerns.India too has made clear its security concerns with Huawei, especially in the wake of heightened border tensions with China. New Delhi has already barred state-run carriers from sourcing equipment from Huawei and ZTE (also Chinese) and is believed to have informally nudged private telcos to replace Chinese equipment over time, without disrupting consumer services. 77057709The US has long been warning other nations not to use Huawei. The UK recently banned the purchase of the company’s 5G equipment and said any such gear that’s already installed needs to be removed by 2027.‘Enough Suppliers in the World’Randeep Sekhon, chief technology officer, Bharti Airtel, previously told ET that alternative suppliers were available if needed. “We will be fully compliant with government orders,” he had said. “To be fair, there are enough suppliers in the world and new suppliers are coming in. India should be fine with it.”The comments had come soon after the US tightened restrictions on the Chinese vendor, which meant that Taiwan Semiconductor Manufacturing Co, the world’s largest contract semiconductor maker, had to stop taking new orders from Huawei. This is expected to affect Huawei’s supplies globally, including those to Indian vendors.The Swedish rival is looking to step into the breach. “Ericsson is getting aggressive with its pricing and is being looked at like the true alternative, having provided previous generation technologies,” said the person cited above, adding that the next step for Bharti Airtel is to explore similar possibilities in the remaining two circles with Huawei equipment.Bharti Airtel recently renegotiated its 4G network deal with Finland’s Nokia in nine circles to supply equipment until 2022. With the likely new deal, Ericsson could be supplying gear in eight circles, Huawei in two and ZTE will be at three.The company hasn’t moved yet on replacing ZTE, which supplies equipment to Bharti Airtel in Punjab, Haryana and Kolkata.“Any uncertainty in future supply of equipment from Chinese vendors such as Huawei will hurt telecom users of that equipment. It is natural telcos would want to mitigate the risk,” said Mahesh Uppal, director at telecom consultancy firm ComFirst. “How long it will take and what cost would it entail are things that would be on top of the mind for companies, given the poor financial health of the sector.”Rohan Dhamija, head of Middle East and India (South Asia), Analysys Mason, said, “After the recent global decisions from the US and now the UK, Airtel would definitely be wanting to reduce dependence on Chinese vendors, especially when its competitor has zero dependence on Chinese vendors.”Even Vodafone Idea Ltd (VIL) is said to be concerned about sourcing equipment from Huawei, but will find it tougher to replace the Chinese vendors. It signed multi-year deals as recently as 2018 after Vodafone India and Idea Cellular merged, industry executives said.In fact, the two Chinese vendors had increased their share of the total pie, contributing 35% of the telco’s total network requirements with 65% going to the two European vendors, compared with a 20:80 ratio a few years earlier. Nokia currently provides network equipment to the combined Vodafone-Idea Cellular entity in nine circles, followed by Ericsson in eight circles. Huawei and ZTE supply equipment to VIL in seven and five circles, respectively.

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