India Considers ‘Rip and Replace’ of Huawei, ZTE Telecom Equipment; Airtel and Vodafone Idea Could Face Costs of Up to $3 Billion

India Considers Rip and Replace of Huawei, ZTE Telecom Equipment Airtel and Vodafone Idea Could Face Costs of Up to 3 Billion

Summary:
India is assessing whether legacy Huawei and ZTE telecom equipment should be removed from existing networks under a potential “rip and replace” programme. The DoT is collecting information on the equipment still in use and the replacement costs, with the MHA evaluating the proposal’s financial impact. Industry estimates suggest replacing Chinese hardware and software in Airtel and Vodafone Idea networks could cost up to $3 billion, while similar measures have already been implemented in the US and UK. 

India is examining whether older telecom equipment supplied by Chinese companies Huawei and ZTE should be removed and replaced across existing networks. The government has asked telecom operators to provide details on the equipment that remains operational and the estimated expense involved in replacing it.

The assessment, being carried out for the Ministry of Home Affairs (MHA), could result in significant additional capital expenditure for telecom operators.

Government Reviews Legacy Chinese Telecom Equipment

The Department of Telecommunications (DoT) is gathering information from telecom service providers about equipment obtained from vendors that are not classified as trusted sources, including Huawei and ZTE. The exercise aims to establish the extent of such equipment still deployed across Indian networks and estimate the cost of replacing it with products supplied by approved vendors.

The review is linked to the National Security Directive on the Telecommunication Sector, which was introduced in June 2021. The trusted-source regime applies prospectively, meaning equipment installed before the framework took effect was permitted to remain operational.

Huawei and ZTE have not obtained trusted-source status and are consequently prohibited from supplying new equipment for India’s 5G networks. However, equipment supplied by the companies in earlier years remains operational in portions of 4G and fixed-line infrastructure.

Both firms have previously supplied telecom equipment to operators such as Bharti Airtel, Vodafone Idea and state-owned BSNL. Their involvement has since been limited, although operators continue to operate certain legacy systems and, in some instances, have requested permission for maintenance work or particular equipment replacements.

Replacing Equipment Could Run Into Billions

The MHA is evaluating the potential scope and financial implications of a broader “rip and replace” exercise. Such a programme would be significant for telecom companies because removing functioning legacy equipment and deploying alternatives would require additional capital investment.

According to industry estimates cited in the report, replacing Chinese hardware and software across the Airtel and Vodafone Idea networks could cost as much as $3 billion.

The government has requested information from telecom operators to assess the potential financial impact. The MHA would make the final decision on whether to implement such a programme, while the DoT is assisting with the assessment. The trusted-products framework was initiated by the National Security Council Secretariat (NSCS), with the DoT providing regulatory support through its licensing authority. Queries sent to Airtel, Vodafone Idea and the DoT had not received responses.

US and UK Have Taken Comparable Measures

India’s review follows similar measures adopted in Western countries. In the United States, the Federal Communications Commission introduced a “rip and replace” programme that provides reimbursements to eligible operators for removing and replacing telecom equipment identified as posing national security risks.

The UK has likewise prohibited the purchase of Huawei 5G equipment and has required existing equipment to be removed by 2027.

For India’s telecom industry, the issue now extends beyond whether older Chinese equipment should be replaced. The key considerations are how much equipment remains deployed, the timeframe for its removal and which parties would bear the resulting costs. The government’s ongoing assessment is expected to determine the scope of any subsequent action.

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