Bharti Airtel has reportedly begun its so-called “clean telco” journey in India and is now gradually reducing exposure to Chinese telecom vendors Huawei and ZTE. The development comes after the US government listed Reliance Jio among global telcos that are becoming “clean telcos” by avoiding Chinese vendors for their 4G and 5G networks.
Airtel, which is India’s second-largest telco by subscribers, has already removed Huawei from its 4G network in two out of four telecom circles in the last 12 months, and it will soon remove ZTE from North India’s Punjab circle.
The latest development comes at a time when governments are scrutinizing Chinese vendors across the world over alleged cyber-snooping concerns.
According to a report by the Economic Times, Airtel is replacing ZTE with Finland’s telecom gear maker Nokia in the circle.
With this, ZTE’s total circle count will be reduced to just two – Kolkata and Haryana. Huawei, on the other hand, powers Airtel’s 4G in Karnataka and Uttar Pradesh West.
The report, citing an Airtel source, said that Airtel will now gradually remove both vendors from remaining four circles. The person said that for any future 4G network expansion and modernization, Airtel would only work with European vendors.
Analysts told the publication that said Indian telcos would need at least four years to replace Chinese equipment from their networks completely.
Airtel is also considering US and European vendors for its transport and core network expansion and modernization. It recently awarded a contract to Ciena and is currently in talks with players like Nokia and Cisco.
Bharti Airtel has already given lucrative network expansion contracts to both European vendors. Nokia and Ericsson are Airtel’s biggest suppliers of 4G gear in India.
Earlier this year, the telco awarded a network extension deal to Nokia worth $1 billion for nine telecom circles. Ericsson also managed to secure a similar agreement from Airtel for eight telecom circles.
Both European vendors have reportedly informed Airtel that they will only supply locally made 5G equipment whenever the telco is ready with commercial 5G license and spectrum.
Both Huawei and ZTE have suffered losses this year in India in the absence of any 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.
ZTE and Huawei work with Vodafone Idea in five and seven telecom circles, respectively. Reports suggest that the cash strapped telco hasn’t been able to clear network-related dues, hence adding to the woes of Chinese vendors.
State-run Bharat Sanchar Nigam Ltd (BSNL) has also stopped sourcing equipment from Chinese vendors. The move has significantly impacted ZTE, which is the second-largest gear provider for the telco.
BSNL owes ZTE over $ 135 million in network-related dues.
For 5G, Airtel has already charted out its localization strategy under which it is developing its 5G network equipment ecosystem in the country with the help of various US and Japan-based companies.
The Sunil-Mittal led telco’s change in strategy will allow it to have better control over the supply chain and reduce overall network deployment costs by looking beyond traditional vendors.