Huawei has managed to secure a wireline network contract worth Rs 300 crore ($40 million) from India’s second-largest telco, Bharti Airtel. This comes quickly after both India and China agreed to de-escalate border tensions.
The latest contract brings a much-needed respite to the Chinese telecom equipment maker, which has lost significant business from the Sunil Mittal-led telecom operator in the last 15-18 months.
India’s Economic Times reported that Huawei had secured purchase orders (POs) from Airtel for its National Long Distance (NLD) optical transport network, which is already being operated by the Chinese vendor. Airtel’s other two NLD networks are reportedly managed by Finland’s Nokia.
“This is kind of a deal is considered massive in this space. Airtel has already issued a procurement order (PO) to Huawei…the value of this deal is a major part of Airtel’s overall CAPEX budget for non-radio network,” a senior executive working with Huawei’s rival was quoted as saying.
The development comes when the Chinese vendor is facing uncertainty over its future in the Indian market, especially its participation in the country’s upcoming 5G networks.
Bharti Airtel Chairman Sunil Mittal had previously backed Huawei and publicly called the vendor’s 3G and 4G products better than those of its European rivals, the report said.
The company’s newly appointed chief executive officer David Li recently sought a level-playing field in the country’s telecom sector and said that he is bullish on India, despite the recent troubles due to diplomatic tensions.
Li claimed that the gear maker’s local operations are “compliant with all the rules and regulations” that India has mandated, and it is looking to work with state-run telecom operators BSNL and MTNL for their upcoming nationwide 4G network projects.
Interestingly, the latest contract was finalised when the Sunil Mittal-led had floated a request for proposal (RFP) to replace Huawei from its national long distance (NLD) network. It was running proof of concepts (PoCs) under the RFP with vendors like Nokia, Ciena and Infinera for the NLD network.
“The RFP was to replace Huawei’s NLD network. And, now Airtel has given a big contract to Huawei, while this RFP is still on…,” another senior industry executive told the publication, suggesting that Huawei won the order without participating in the ongoing RFP.
The Chinese vendor has been present in India for over two decades and is a major supplier to Vodafone Idea. India’s second-largest telco, Bharti Airtel, has been reducing its exposure to both Huawei and ZTE by replacing them with Ericsson and Nokia.
Huawei is willing to participate in the country’s upcoming 5G networks, having already submitted 5G trial applications with Airtel, Vodafone Idea and Reliance Jio. The Indian government is expected to allocate trial spectrum to telcos in the coming weeks.
Both Huawei and ZTE have suffered losses this year in India in the absence of new business from their existing telco partners. Due to the losses, both Chinese companies have laid off a majority of their employees in the country.
Notably, India is currently preparing a list of ‘trusted sources’ under the National Security Directive (NSD) for acquiring equipment for telecom networks. The decision to establish the NSD is likely to directly impact Chinese telecom gear vendors, especially Huawei and ZTE that are already going through heightened security across the world.
In December, India had suspended the certification process for wireline equipment, directly impacting Huawei and ZTE. Both Chinese vendors have a high wireline market share with Bharti Airtel and Vodafone Idea.
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