Huawei wins fresh deal from Vodafone Idea for network upgrading

upgrading network
Huawei engineers working on tower. Image courtesy Huawei.

Huawei has reportedly won fresh network business worth $50-$60 million from India’s Vodafone Idea, which is currently in the process of upgrading its wireless and wireline network in the country. 

The network deal brings much-needed respite to the Chinese telecom equipment maker, which has lately lost significant business from Bharti Airtel due to the uncertainty over its participation in the upcoming 5G rollout.  

The Sunil Mittal-led telco, however, awarded a wireline network contract worth $40 million to Huawei in March, which came quickly after both India and China agreed to de-escalate border tensions.

According to a report by the Economic Times, Vodafone Idea finalised a new “add-on” network deal with Huawei for 4G network expansion and transport network upgrading. 

Vodafone Idea is Huawei’s largest customer in India, with the latter’s 4G equipment deployed in seven telecom circles. The gear vendor, which has been operating in India for the last 20 years, also provided core and transport technology solutions and equipment to the telco in the past. 

Bharti Airtel, however, has been reducing its 4G wireless exposure to both Huawei and ZTE by replacing them with Ericsson and Nokia.

The report said that the deal was finalised in March, just before the Indian government amended telecom licenses for telecom operators, mandating them to use equipment only from trusted sources from June 15, 2021.

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, who are already going through heightened security worldwide. 

“The new business includes wireless and wireline upgradation including microwave and transport network along with software upgradation. The order was given in March alongside the Airtel-Huawei national long-distance deal,” a person familiar with the matter was quoted by the publication. 

Despite winning new business, the Chinese gear maker is fulfilling only limited equipment deliveries due to pending dues worth Rs 850 crore or $116 million. Vodafone Idea hasn’t cleared the outstanding dues to its vendor partners due to ongoing financial problems. 

“Huawei doesn’t want more money to get stuck with Vodafone Idea due to its current financial situation. They are delivering against small purchase orders as and when VIL clears some payment for previous orders,” the person told the publication. 

Huawei is supplying only against limited purchase orders (POs), the report added.

The telco’s newly appointed chief technology officer, Jagbir Singh, recently told the media that the telco would continue to buy equipment from its Chinese partners Huawei and ZTE for its radio and transport network expansion. He, however, added that Vodafone Idea wouldn’t give any new contracts to these companies. While Huawei is willing to participate in the country’s upcoming 5G networks, the Department of Telecommunications didn’t approve the vendor’s 5G trial applications with Airtel, Vodafone Idea and Reliance Jio.

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