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Huawei woos No. 2 wireless market as India sits on 5G fence

India has been an investment focus for Huawei even though the government is still to decide on auctioning 5G spectrum to carriers.

Huawei Technologies, the wireless network giant blocked from selling its equipment in the US and some other markets, is betting it can find customers for its 5G gear in India, where the government has yet to weigh in on US calls for a boycott against the Chinese company.

The world’s largest maker of components for 5G networks said it’s continuing to invest in India and working with the government to counter US allegations that its equipment could be used to help China’s government spy on countries.

“The approach we took to engage with the Indian government is very transparent, direct and cooperative,” Jay Chen, chief executive officer of Huawei’s India business, said in an interview in New Delhi. “We have given a full commitment to follow all rules and regulations, full compliance.”

India, the largest wireless market outside China by the number of subscribers, has been a focus for investment by Huawei, even though the government has yet to set dates for auctioning 5G spectrum to carriers. While the Trump administration has asked other countries to shun Huawei, the company’s products remain essential to India’s wireless ecosystem and technological development, Chen said.

India has fallen behind China and some other countries in plans to introduce 5G, superfast networks seen as essential to developing factory automation, autonomous driving and other artificial intelligence applications. The nation’s phone carriers are struggling with debt and have already called the government’s plan to auction 5G airwaves too expensive.

“The Indian market has an ecosystem now,” Chen said in an interview Tuesday. “If this ecosystem is broken because of the absence of Huawei, I think the loss will not only be financial but also about losing technology development.”

US pressure

At the same time, the US is applying pressure on countries to reject equipment from Huawei, which is China’s largest tech manufacturer and a key to the country’s bid to become a superpower in the technology industry. The US hasn’t ruled out punitive measures aimed at allies that refuse to ban Huawei equipment on their 5G networks, Rob Strayer, the State Department’s deputy assistant secretary for cyber policy said last month.

US Commerce Secretary Wilbur Ross last week said the US push for a boycott is driven by concern about security, rather than an attempt to protect its own industry from competition.

“We hope that our geopolitical partner India does not inadvertently subject itself to untoward security risk,” Ross said in New Delhi earlier this month.

Top carriers Reliance Jio Infocomm and Bharti Airtel have decided to work with non-Chinese equipment manufacturers for 5G trials, the Business Standard newspaper reported last month, citing people it didn’t identify. Vodafone Idea Ltd. is working with Ericsson, Nokia Oyj and Huawei on developing 5G technology, according to the newspaper. Jio and Airtel declined to comment, the paper said.

Huawei role?

Airtel, as the company is known, said Wednesday it had selected Ericsson to supply components for its network to accommodate an increase in data usage. The “cloud packet core” equipment can help in the transition to 5G services and make it easier for the carrier to offer new services to businesses and “internet of things” uses, Ericsson said in a statement.

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi met last week and agreed to set up a new mechanism to discuss trade during two days of informal talks in southern India that were aimed at re-calibrating strained ties between the nations. Huawei’s prospective role as a supplier of 5G equipment wasn’t discussed, Indian Foreign Secretary Vijay Gokhale told reporters October 12.

Huawei said Wednesday it has signed more than 60 5G commercial contracts to date worldwide. Revenue jumped 24% in the first nine months of this year, a sign the Trump administration’s sanctions aren’t wiping out growth.

Chen said Huawei’s India strategy is long-term.

“During my engagement with the India government, I didn’t get any negative feedback,” he said. “I have full confidence Huawei will be welcomed by the Indian government.”

© 2019 Bloomberg L.P.

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