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Sources suggest that the Indian telco signed a roughly $54.7 million deal with Huawei just before government restrictions banning such transactions came into effect
Back in March, the Indian government tightened procurement rules for internet service providers (ISPs), mandating them to only buy equipment from trustworthy sources.
“With effect from June 15, the licensee shall only connect ‘trusted products’ in its network and also seek permission from the Designated Authority for upgradation of existing network utilising the telecom equipment not designated as trusted sources,” said the Department of Telecommunications’ amendment.
While not explicit, this move was widely considered to be a way of indirectly excluding major Chinese vendors like Huawei and ZTE from the country’s upcoming 5G networks. Since then, both Huawei and ZTE have been notably omitted from the government’s list of permitted vendors allowed to take part in Indian 5G trials.
Now, sources are suggesting that Vodafone Idea, now branded as Vi, had awarded an additional contract to Huawei just weeks before the government amendment was announced.
The ‘add-on’ contract is reportedly worth around $54.7 million, with a primary focus on upgrading existing software and hardware. The sources also suggest, however, that Vi already owes Huawei around twice that sum for existing contracts, with Huawei only delivering limited equipment as a result while it waits for payment.
Vodafone Idea and Huawei have denied signing any new contracts this year, but sources suggest that this can be explained since the deal was not ‘new’, but rather upgrades on existing contracts.
Vi is Huawei’s largest Indian customer, using the vendor’s 4G wireless equipment for in seven telecoms circles, in three of which it also uses ZTE and Nokia gear.
For the operator’s two major rivals, Bharti Airtel and Reliance Jio, limitations on Huawei are less troubling. Airtel awarded a $1 billion RAN contract to Nokia last year, as well as signing a multiyear contract with Ericsson for 5G-ready radio and transport products. Meanwhile, Jio uses Samsung exclusively for its 4G network and is currently in the process of developing its own 4G and 5G network equipment.
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