Telecom industry expectations in 2013: Huawei and ZTE need to build more credibility

Telecom Lead India: Building strong credibility among industry stakeholders will be the focus of Huawei and ZTE in 2013, especially after the negative remarks of the US Intelligence committee.

Negative image has already marred business of ZTE and Huawei.

Besides America, India, Australia, Canada and the U.K. have reservations about doing business with the Chinese telecom equipment suppliers, fearing security issues.

Listing on an American bourse will be one of the immediate and important solutions for both Chinese mobile equipment vendors which compete with European and American players offering cost effective solutions.

Both Huawei and ZTE are doing extremely well on enhancing relationships with American companies. But developing strong relations between government heads are becoming strategically important for improving business conditions.

Setting up manufacturing facilities in local markets will also erase concerns as 100 percent locally produced equipments will reduce security problems. India is encouraging local production as part of this strategy.

Last month, Indian telecom ministry admitted that network threats exist. Milind Deora, minister of State for Communications & IT, did not directly drag Huawei and ZTE, when he said: “It is a known fact that in the modern age, telecom equipment and networks used for provisioning of telecom services are prone to spyware/malwares etc, emanating from the equipment itself or embedded software contained in it or from antisocial or anti national individuals or agencies.”

At present, there are no major threats to Huawei and ZTE in India. “No specific issue has arisen due to equipment originating from any specific country. However, as and when any specific issue arises or a report is received, the regime can be tightened for the equipments coming from a specific country or source or group of countries or companies,” Deora said.

India government feels that telecom service providers are responsible for the security of their network. But alleged spying on network can affect government’s strategies during crisis. It is beyond offering protection to telecom networks by mobile operators. America fears that Chinese mobile equipment players can control networks during a war and it will sabotage American strategies.

American US Intelligence committee’s main concern during the probe was inadequate inputs from Huawei. Chinese companies need to address compliance issues in a significant way.

Note: TelecomLead.com’s editors have selected this item based on the impact it created on the industry and companies.

Krishna Aravind
editor@telecomlead.com

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