scorecardIn the race for 5G, India needs Huawei more than anyone else
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In the race for 5G, India needs Huawei more than anyone else

In the race for 5G, India needs Huawei more than anyone else
Business3 min read

  • The US government has filed charges against China’s Huawei for a number of reasons such as the obstruction of justice, data theft and financial fraud.
  • It has also called on its allies to bar Huawei from conducting 5G trials in their countries citing the firm’s espionage activities on behalf of the Chinese government.
  • However, India and its telecom service providers are relying on Huawei’s technology for the development of 5G.

In December last year, after much deliberation, India decided to let Huawei go ahead with 5G trials - a salient indicator of three things.

Firstly, that it didn’t want to fall behind other countries that sourced technology from Chinese companies. Secondly, that its domestic companies didn’t have the ability to compete with Chinese telecom companies on price and innovation, especially when it comes to providing government services. And finally, that it was serious about deepening ties with China, which meant allowing a Chinese company with a 20-year track record of doing business in India to go ahead with its plans.

India’s telecom service providers were also against a ban on Huawei, saying that they would have to source more expensive equipment from other foreign companies, which in addition, would not be able to keep up with their demand.

However, a recent move by the US government might force a rethink by India.

On January 28th, the Trump administration, acting through the US Justice Department, filed charges against China’s Huawei and Meng Wanzhou, the company’s chief financial officer for a number of reasons such as the obstruction of justice, data theft and financial fraud.

Following pressure from the US, Wanzhou, who is also the daughter of the company’s founder, was detained and arrested in Canada last month for Huawei’s alleged circumvention of Iranian sanctions.

The indictment against Huawei, which is one of the world’s largest telecom equipment and service providers, suggests that the firm continued to conduct business in Iran through two subsidiaries after sanctions were imposed last year and also stole smartphone technology from rival telecom firm T-Mobile.

For its part, Huawei has denied the allegations, claiming it is a casualty in a larger conflict between the US and China. Meanwhile, China has also rubbished the charges as a political power play amid trade tensions.

The charges follow years of reports from the US Congress, and American intelligence agencies alleging the Chinese government is capitalising on Huawei’s global reach by using its technology to spy on other countries. The issue becomes ever more pressing given Huawei’s leadership in the global race to develop and scale 5G technology.

In recent months, US President Donald Trump has called on allies to bar Huawei and other Chinese technology companies like ZTE from conducting 5G trials within their borders citing security concerns, a New York Times report found.

Since 2013, Huawei and ZTE haven’t been able to sell equipment or bid for government contracts in the US owing to concerns that they could steal data on behalf of the Chinese government. The ban was reinstated in August last year. Countries like Japan and Australia have followed suit with the UK and Germany also mulling a ban.

It remains to be seen whether India will respond similarly. However, for now, it seems that the Indian government will stay the course.

India’s telecom ambitions are interlinked with that of Chinese technology firms. The fact that equipment made by non-Chinese telecom equipment manufacturers also contains or is vulnerable to spyware further legitimises India’s accommodating stance.

The India government’s short-term priority is to promote the usage of 5G, and Indian technology firms are currently testing their 5G capability with Huawei’s equipment. It might already be too late for a ban.

However, it may not be prudent for the Indian government to give Chinese firms a free reign It will have to develop strict testing standards when it comes to imported telecom equipment for security purposes. It might raise the ire of the US in the short-term, but in the absence of any cheaper options, its decision is already made.


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