Virendra Pandit
New Delhi: Not only in manufacturing or supply chain management, the world is now opening multiple channels to reduce its dependence on China and cornering it in the technology business, including the telecommunication sector.
The United States, Australia, and New Zealand have effectively banned the technology from China’s IT companies Huawei and ZTE from their 5G roll-out. Several European countries, including France, Britain, Spain, Poland, and the Czech Republic are reconsidering their strategy based on national security concerns.
Germany is also likely to shun the import of Huawei components in its 5-G network after the United States, the United Kingdom, Australia, and Japan effectively banned the company from building their 5-G networks amid fears that Beijing could use Chinese tech companies to spy on their citizens.
The latest to join this bandwagon is India’s telecom sector.
For example, according to media reports, Ericsson has just won a multi-billion dollar 5-G equipment contract from Indian major Bharati Airtel. Only in September, the Swedish giant had got part of a USD 3.6 billion contract for selling 5-G equipment for India’s other telecom company, Vodafone Idea. Ericsson shared that contract with Finland’s Nokia and South Korea’s Samsung.
Ericsson is happy that India’s demand has cushioned a slowdown in revenue from its main market in the US where telecom operators have been lowering spending.
With the India orders, Swedish telecom gear maker Ericsson is likely to return to the Asia market in a big way.
The new contracts are expected to boost Ericsson’s revenue next year after seeing a big fall in contracts from India in the first half of the year.
Sales in Southeast Asia, Oceania, and India decreased by 44 percent in the second quarter. Ericsson will announce its third-quarter results on Tuesday.
Much of its deployment is likely to happen next year.
With the Indian orders in, the shares in Ericsson rose as much as 1.8 percent, the reports said.
Demand from the Indian 5G market started skyrocketing in 2023, when sales from the region grew as much as five times, as Airtel and Jio, the telecom unit of Indian conglomerate Reliance Industries, started to scale up 5-G services.
Global telecom equipment revenue had dropped 16 percent year-over-year in the second quarter, recording a fourth consecutive quarter of double-digit contractions.