Indian mobile users may face issues with 4G network speeds in the coming months as private telecom operators struggle to maintain the network expansion pace due to the global shortage of semiconductor and component supply chain disruption.
Reliance Jio, Bharti Airtel and Vodafone Idea are reportedly facing delays of around 3 to 6 months in their 4G network expansions due to the global supply chain disruption.
Mukesh Ambani’s Jio procures 4G gear from Korean company Samsung, whereas Airtel and Vodafone Idea primarily work with European vendors Nokia and Ericsson. Huawei and ZTE have also been partners for Airtel and Vodafone Idea, but both telecom operators have lately reduced exposure to Chinese vendors.
According to a report by the Economic Times, availability of 4G RAN equipment, along with routers and backhaul infrastructure equipment, may become scarce in the coming months, delaying Indian telecom operators’ network capacity expansion plans.
All three private telecom operators have been aggressively onboarding 4G customers in the country. However, any further delay in 4G coverage and capacity expansion will result in network congestion. Notably, the average 4G data consumption per month by Indian users is the highest globally due to affordable data rates and smartphone prices.
Fitch Ratings senior director Nitin Soni told the publication that potential disruptions in the availability of 4G equipment that use semiconductors are likely due to the persisting shortage globally.
“… it could delay gear procurements by telcos and slow down network deployments, expansions,” he said, adding that any potential delays in 4G networks-related CAPEX spend by telcos “due to a prolonged shortage of semiconductors would impact network capacity and coverage quality amid heavy data consumption”.
Indian telecom operators have already been delaying large scale network expansion orders to their partners such as Nokia and Ericsson in the absence of approvals from the office of the National Cyber Security Coordinator (NCSC), the designated authority to give approvals to gear vendors and their equipment.
India’s National Cyber Security Coordinator (NCSC) Lt General (retd) Rajesh Pant, who is the designated authority to give approvals to gear vendors and their equipment, last week revealed that the first list of approved trusted companies or trusted sources will be out in the first week of October.
Pant also rejected delays-related claims by telecom operators and said that the authority has come up with the provision of a one-time exemption for one year, which allows telcos to execute “critical” network deployment without the trusted sources approvals.
Swedish telecom gear maker Ericsson said that the chip shortage would continue into next year. The company’s India spokesperson informed the publication that it might eventually be impacted as the industry as a whole if the current semiconductor market conditions prevail long-term.
Ericsson currently manufactures 4G and 5G equipment at its unit in Pune, owned by Jabil. Nokia, on the other hand, produces network equipment in Chennai. Both companies also export equipment to other markets from their respective Indian facilities.
ZTE, Huawei and Samsung don’t make telecom equipment in India and rely on imports to serve Indian telecom operators.
Ericsson spokesperson said that the vendor has seen “limited customer impact” in India. “While Ericsson has had limited exposure to technologies affected by semiconductor shortages, we had anticipated inconsistencies in supply chain and had taken proactive action starting already last year to significantly increase flexibility and supply chain resilience,” the India spokesperson was quoted as saying.