Huawei and ZTE Stand to Lose Business Globally in the Near Future
Huawei and ZTE are amongst the major telecom gear manufacturers and suppliers globally. Both the companies have played a pivotal role in helping operators across the world launch mobile networks. Be it 2G, 3G, 4G, or 5G, both Huawei and ZTE have been involved in the telecom market for a long time.
However, the recent developments and negative branding of
the companies might leave them financially paralysed in the coming few years.
For starters, countries such as the US and India, which have major telecom
markets, are slowly phasing out Chinese vendors from their network ecosystem.
Governments are worried about national security because of
the alleged ties of Huawei and ZTE with the Chinese government. The allegations
haven’t been proved yet, and both the companies at every point have denied any
such connection.
Regardless, once the perception is made, the market reacts.
That is what is happening with Huawei and ZTE. The Indian government has
already said that telcos can’t purchase gear or equipment from any vendor that
is not in the ‘trusted list’ determined by the National Cybersecurity
Coordinator (NCSC).
Lowering Reputation of Huawei and ZTE
The premier telco of India, Bharti Airtel, has had some good
and long-standing partnerships with Huawei. Sunil Bharti Mittal has been found
backing Chinese vendors on multiple occasions, saying they have proven
technology at a cheaper cost.
But while the cost might be lesser for the telco, it might
become too expensive for the government when it has to face network security
threats from China.
Because of the lowering reputation, both Huawei and ZTE
stand to lose major business across the globe in the near term. It is not like
their business is dead; both the companies have been getting contracts
globally, but the trust in them has gone down.
Huawei believes that it still has a fair shot in India. The
company said that when the moment arrives, the Indian government will take a
calibrated approach on the matter. At the same time, the Indian government has
not said anything in support of the Chinese firms.
The companies need to push hard into building a better
reputation quickly before new players emerge and eat away their market share.
There is still plenty of business that needs to be done in developing nations,
and both ZTE and Huawei and equipped with resources to facilitate the needs of
such countries.
But it won’t happen if the reputation of the companies keep
going down. Huawei and ZTE are still working in India but on their older
contracts. Indirectly, the government has asked telcos not to award any
contract to the Chinese vendors.
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