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Dependence on China in telecom sector makes India vulnerable

NewsDependence on China in telecom sector makes India vulnerable

The backbone of India’s crucial wireless infrastructure is full of Chinese equipment from ZTE and Huawei.


Houston: With the rising tension along the border with China, it is apparent that India needs to rethink its trade with China. This is more important in critical technology areas like cyber security, telecommunication equipment, wireless technology, cyber forensics etc.

The telecom infrastructure in India is largely based on wireless technologies. 5G technology is thus a very crucial piece of infrastructure where India must be cautious about inviting tainted Chinese firms like Huawei and ZTE.

India is already very vulnerable, as the backbone of its crucial wireless infrastructure is full of Chinese equipment from ZTE and Huawei. The equipment from these two Chinese manufacturers has been banned by the United States and many European countries, citing sever security risks. The US government has imposed an outright ban on buying any equipment, component or even a chip/microprocessor from these two giants, as the US strongly believes that they could probably act as Trojan horses and spy on the critical telecom infrastructure. In 2018, the major US carriers, Verizon an AT&T, decided to stop selling mobile phones from Huawei. This bold move was lauded by US intelligence chiefs. Indian public network operator BSNL is heavily dependent on the equipment from ZTE and Huawei. In fact, back in early 2014, it was reported that Huawei allegedly hacked BSNL equipment and the Parliament was informed of it. A probe was instituted and a report is yet to be tabled in Parliament.

Let’s take a look at India. Chinese manufacturers have a whopping 75% of the market share and this is only projected to increase in the years to come. Samsung, the lone South Korean company, is the only one that has some market share to claim. The likes of Apple and Google do not have even 1% of the market share. This is a huge risk that India needs to take a serious look at. Google has pulled the licence it granted to Huawei and suspended its relationship with Huawei. This has forced Huawei to shift to a home-grown version of Android based on the open source version. This is a further threat as one begins to wonder what else Huawei has baked into it proprietary phones.

In January this year, Telecom Minister Ravi Shankar Prasad announced that the 5G trials would be done with all vendors and operators. This sent a chill down many people’s spine as this means that Huawei was given a zero barrier entry into this crucial, next generation technology that the major Western nations have shunned and banned. Even though contracts have not been awarded, one can easily assume “its cheap and easy to procure” attitude in the short term will end up harming India in the long run. Incidentally, Huawei threatened that it will pause investment in India if it was left out of the 5G race. Huawei has invested around $3.5 billion in India to date. It is interesting to note that the Telecom Minister chose to open up the 5G equipment trials to all vendors.

In October last year, the US government has warned India over using Huawei for 5G rollout. It went further to warn the Indian government and companies not to share any US made equipment or other products and technologies with Huawei or incur punitive action.

TRAI, the Indian regulator has recommended, in August 2019, that the government auction all available spectrum in the forthcoming round of its auctions. When pressed on the issues with Huawei, it has washed its hands of recommending Huawei and left it to the government to make the call.

What is equally shocking is that, that IIT Madras, IIT Hyderabad and IIT Delhi have demonstrated considerable expertise in 5G technology. But the government allocated a measly Rs 250 crore, in 2018, for such an important technology platform of the future. It was reported that IIT Madras has also developed an indigenous 5G test bed in 2018. Even IIT Delhi has set up a 5G lab in collaboration with Ericsson. Precious time has been lost and now India is on the verge of surrendering to the next generation technology—to buying Chinese equipment. India should not make this blunder and it will cost it dearly and undermine the core security of our wireless telecom infrastructure.

The Narendra Modi government must take a serious review of allowing Chinese firms to compete in 5G technology. Prime Minister Modi will herald a secure future if he takes up the task to ban equipment from both these companies immediately. After all, “Make in India” is close to the PM’s heart. Even while announcing the Covid relief package, he gave another rallying cry of “Vocal for Local”.

India should not just be a sweatshop to assemble compromised components from China and call it “Made in India”. The government must encourage and incentivize Indian technology companies to build these silicon components locally. India should attract the vast talent from Silicon Valley in the US to start such core technology development in India, in a big way.

The biggest roadblock for PM Modi to achieve his dream of “Make In India” or “Vocal for Local” is the archaic bureaucratic system. It takes just a few months to start a full production facility in countries like Vietnam, Thailand and Philippines, whereas the regulatory/approval process of India has exasperated many companies who wanted to jump in and use the excellent talent pool of young engineers in India.

Apart from delays in acquiring land, building infrastructure, many electronic equipment manufacturers faced significant challenges in importing crucial assembly equipment from China, South Korea, US etc. The Modi government has, however, eased some of the contentious rules and procedures that caused delays in importing these equipment. This is a good start.

The Covid pandemic has made many global giants to re-evaluate their manufacturing strategy and are actively looking for countries to spread their risks and not depend solely on China as their manufacturing base.

Recently, when Apple was looking for a new facility to manufacture its headphones, it ended up choosing Vietnam, as Vietnam made the process easy and hassle free

India needs to look into the future in multiple fronts and make necessary changes immediately:

  1. Internal security: It needs to start investing and encouraging local companies to start building core technology within India.
  2. Global supply chain: India must change significantly so that global companies see a seamless, painless and rapid process to shift and jumpstart manufacturing products in India. India has all the necessary resources such as skilled manpower and talent; far better intellectual property protection regime than China, which has been a major source of concern for many global players; a vibrant young democracy.

In all this, the biggest challenge is the bureaucratic process.

On another note, let’s take a look at the technology being used for Aadhar. The biometric technology that forms the core of Aadhar enrolment, verification and validation is significantly from a French company, namely Sagem. The Centre for Development of Advanced Computing (C-DAC), an Autonomous Scientific Society of the Ministry of Electronics and Information Technology (MeitY), of the Government of India, has developed a total indigenous technology that competes with the French company. It’s a shame that this technology is not being used by the government to replace the expensive piece of technology that India pays the French company.

In addition, CDAC has also developed technology in areas of cyber security and cyber forensics. PM Modi must implore Indian entrepreneurs to collaborate and harness these technologies and showcase these to the world. India can become a global leader in these crucial and fast growing fields if it exploits these developments.

The next five years are going to be crucial for India. Prime Minister can usher in a next generation India by ensuring that his call for “Vocal for Local” is not a mere slogan but a serious vision for the future. He has all the ingredients and resources to make this happen. All it needs is the right execution.

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