The nexus between the Huawei Crisis & the Indian Telecom Sector


INTRODUCTION

In modern world technology has become the most important part of human life, human cannot survive without technology. Through inventive mind and technology, the human had developed smartphones, which makes the day to day life easy. In present, China is one of the leading producers of cheap telecommunications devices and electronic goods in the world. China’s success in making globally competitive tele-communications firms has led the Chinese government’s desire to hold its position in next generation Information Technology (IT). China is the world’s one of the leading producers of Internet of Things (IoT) devices. Although there has been rapid increase in these IoT devices, yet there are shortcomings in these devices which has exposed them to many vulnerabilities of intelligence, infringement with personal data and cyber-attacks etc.


SHORTCOMINGS IN HUAWEI

Chinese giant telecom company Huawei is the world’s leading producer of electronic goods, but US government recently blocked Huawei products in US market on the grounds of national security, this contention was made in consideration of cyber security and hacking of foreign network.

There are security problems related to 5G network. 5G technologies are expected to support interconnected or autonomous devices, such as smart homes, self-driving vehicles, precision agriculture systems, industrial machinery, and advanced robotics. In addition, personal data collected by thousands of IoT devices could be stolen by malicious actors.[1] The severe security protections and universal connectivity of IoT devices create chances of vulnerability that hackers or malicious state actors can exploit to hold critical infrastructure, businesses and individuals at risk.[2]

WHAT IS THE IMPACT IN INDIA?

India is under tremendous pressure from USA, and at the same time Chinese government is also pushing Huawei in Indian telecom sector with 5G network infrastructure. Evidently India is failing to resist US pressure on Iran and Venezuela oil issue. USA has threatened 5G, Huawei and India, 10 drastic reduction of H-1B visa to India if we go ahead with our data localisation policy.[3] All these are not good advertisement for India’s strategic autonomy. If US does not support Huawei with Intel processor, android licensing will get blocked and Huawei phones will have no access to Google Playstore and other applications like Facebook, WhatsApp etc. This would not put major impact on Indian telecom sector, however there will be increase in sale of phones which having above applications access. Sale of substitute products will increase.


Effects on Indian Telecom Sector if US blocks support to Huawei

  • There will be delay in instalment of 5G network infrastructure in the country and then there will be higher cost of 5G deployment. Costly rollouts would make 5G services exorbitant to the consumers, it will possibly be limiting the transformative impact of high-speed technology. Spectrum sales would also suffer.[4]

  • There is huge investment of 2.5 Billion of Huawei Money in India market. The company has considerable Indian employees working for it. If US blocks Huawei, it will create huge impact on the Indian Economy. Economy will be evidently denied the benefits of money of 5G investments. It will dastardly effect the already dwindling employment sector. India is losing its man power. Educated unemployed youth is a major concern which cannot be overlooked. Other Chinese Companies will hesitate to invest money in India.

  • The people who have Huawei phone would suffer technical problems because companies like Airtel, Vodafone and Idea are using Huawei gear.

  • India has not been very good in leveraging its market. It is important for India to achieve the strategic objectives, the higher the stakes in the Indian market, the greater the potential political leverage for India. In 2009, the State-run telecom giant Bharat Sanchar Nigam Limited (BSNL), in spite of strong opposition from the Intelligence Bureau (IB) and the defence ministry, awarded the contract for telecom equipment to Chinese company Huawei for only southern states. The idea given was that Southern parts of India does not share sensitive borders with countries such as Pakistan, China and Bangladesh as they have no international land borders. In today’s networked world this logic is weak. The Huawei crisis must also be viewed from the border threat and disruptions of systems during a bilateral crisis. The decision on what is the role of Huawei, if at all, in building India’s 5G network infrastructure has to be taken after conducting a cost benefit assessment, given the nature of the bilateral relationship.

  • India’s telecom sector players including the state owned BSNL to Reliance have been using Huawei products and hardware for more than a decade because it is considerably less expensive and the telecom companies get loans from Chinese banks. The security concerns were always there. Now, banning Huawei product would create huge impact on telecom sector of India.

  • These were the projected impacts which would have affected Indian Telecom Sector drastically. A no-ban atmosphere has allowed some space to heal the bilateral ties without effecting each other’s economy. It was a much-needed escape as it allowed India to buy some time and fix its other economic issues. However, this is not the end of this issue. It needs to be dealt with a critical approach keeping in mind the economics of the country is at stake. Huawei will not lose it easily. It will definitely put a stronger game by boosting and making its system at par with other competing systems. Security issues can be resolved and the contention for the proposed ban seems completely politically driven. This attitude between countries will not only hamper diplomacy but will also lead to greater losses for the common man. This issue needs to be decimated carefully to see its effect on the common man.

CONCLUSION

In light of the views expressed, the authors conclude that, India-China relationship is very complex with deep mistrust protected under the impressive diplomacy by both the countries. India has fought a war with China. The land boundary dispute between the two countries remains unresolved. China has constructed road in Doklam which create tension between the two countries. Chinese build up and construction activity, not just along the Line of Actual Control (LAC) but also in sensitive regions such as the Doklam Plateau continue despite the tense 2017 standoff. China’s deep military ties with Pakistan along with it provides for Pakistan based terrorists are testimonies of China’s intentions. Security concerns from India’s perspective become important, to avoid this India’s telecom sector has to make its own telecom giant to provide better telecommunication and telecom services. But India does not have its own telecom equipment manufacturer. Security can only be ensured by indigenous technology. For projects like Digital India and Make in India much efforts in development of indigenous network equipment capability are yet to be made. By blocking the sale of Huawei India’s security concerns are not eliminated. India should follow other countries. What the Europeans countries are doing and how they developed their telecom sector can make India grow from its mistakes. India has nothing to do in hurry. India should wait and not to get involved in the matter and should not commit anything now in spite of extreme US pressure and try to develop its own telecom sector. At present tactful handling of the international relation and the art of diplomacy can alone save Indian Telecom sector from suffering the projected losses.


BIBLIOGRAPHY

Internet Sources:

1. Hoehn, John R. Sayler, Kelley M., National Security Implications of Fifth Generation (5G) Mobile Technologies, June 12, 2019, https://www.hsdl.org/?abstract=&did=826306.

2. Maj Gen PK Mallick, 5G-Huawei and India, Vivekananda International Foundation, July 2019, https://www.vifindia.org/sites/default/files/5g-huawei-and-india_0.pdf.

3. Maj Gen P K Mallick, VSM (Retd), 2+2 Dialogue and Indo US Relations, Vivekananda International Foundation, October 2018 available at: https://drive.google.com/file/ d/1HFIpCaVOYtqqdRb8-x45Xz45We5Xp5mJ/view.

4. Kalyan Prabhat, The Huawei challenge: Implications for Vodafone Idea, Airtel; advantage Jio, June 28, 2019, https://telecom.economictimes.indiatimes.com/news/the-huawei-challenge-implications-for-vodafone-idea-airtel-advantage-jio/69983765.


Footnotes:

[1] Hoehn, John R. Sayler, Kelley M., National Security Implications of Fifth Generation (5G) Mobile Technologies, June 12, 2019, https://www.hsdl.org/?abstract=&did=826306.


[2] Maj Gen PK Mallick, 5G-Huawei and India, Vivekananda International Foundation, July 2019, https://www.vifindia.org/sites/default/files/5g-huawei-and-india_0.pdf.


[3] Maj Gen P K Mallick, VSM (Retd), 2+2 Dialogue and Indo US Relations, Vivekananda International Foundation, October 2018 available at: https://drive.google.com/file/ d/1HFIpCaVOYtqqdRb8-x45Xz45We5Xp5mJ/view.


[4] Kalyan Prabhat, The Huawei challenge: Implications for Vodafone Idea, Airtel; advantage Jio, June 28, 2019, https://telecom.economictimes.indiatimes.com/news/the-huawei-challenge-implications-for-vodafone-idea-airtel-advantage-jio/69983765.


Submitted by,

Aditya Shekhar & Abhishek Choudhary,

Year II, B.A.LL.B. (Hons.),

National Law University, Jodhpur.


(Image used for representational purpose only. Image Courtesy: https://bgr.com/2019/05/31/china-vs-usa-unreliable-entity-list-response-to-import-ban-on-huawei/ )

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