As anyone watching Huawei Technologies’ change of fortunes knows by now, the telecoms gear company has a suite of next-gen technologies and yet faces a near-existential question on their deployment. In a cyclical telecom networks industry, 5G is the beacon of growth for giant equipment makers. Beams from that beacon arose from Chengdu in western China last week where Huawei hosted Indian journalists. Headlines read: 5G rollout will be delayed by 3 years in India if it bans Huawei.
Reports in the two leading business dailies, however, masked one truth: 5G rollout in India will happen only after two-three years, Huawei or not. Neither the market nor the operators are ready for 5G right now, say multiple senior executives from all four telcos. It’s the best-kept secret that they’d all wait out the next spectrum auction, which has already been pushed to early 2020. Nonetheless, it’s understandable why Huawei wants to run the narrative of ‘delay’.
The Chinese telecoms company has clocked stellar growth in India—its revenue grew 55.5% to Rs 12,884 crore ($1.79 billion) in the financial year ending March 2019. Profit, according to its September corporate filings, jumped 213% to Rs 623 crore ($86.9 million). This revenue doesn’t include earnings from its standalone R&D centre in Bengaluru, which reported Rs 895 crore ($124.9 million) in revenue in the year ended March 2018.
This growth comes at a time when Huawei is under pressure from within and without—layoffs are underway in India, reportedly for the first time; its founder Ren Zhengfei recently warned in an internal memo that it is a “live or die moment”. And whatever the trajectory of the US-China trade war talks post the October deadline, Huawei will continue to be treated as a pariah by the largest telecoms market—the US. US President Donald Trump has made this clear.
“Is lobbying happening: US to India, China to India? Yes. Who will win? Whoever brings a bigger wallet to the Government of India. Can telcos be arm-twisted into switching from Huawei to other vendors? Maybe. The technology has evolved to an extent in which all [generations of tech from 2G to 4G, and now 5G] can be housed in a single equipment. Tech has become our own enemy,” said a veteran telco executive when asked how Huawei was holding up in India. He’s been associated with Huawei for close to a decade. (With new tech in base transceiver stations or BTS—the equipment that facilitates communication between a device/phone and a network—the same radio can be upgraded as the G increases.)
“5G is no longer tech; it’s a political game. You can’t determine the cost; it’s not been sold yet.