India China call connected; Huawei to market phones under its own brand in India
July 30, 2010

Having come to a common consensus after six months of lobbying with the Indian Department of Telecom, Chinese telecom equipment firms have been re-allowed to export to Indian firms.The decision follows New Delhi re-allowing Chinese power equipment manufacturers to supply to Indian power companies after a similar trade embargo.

Huawei Technologies which has dealt with security issues several times in India and the US before , further received a shot in the arm – the Shenzen based telecom equipment provider has been granted permission by India’s DoT to sell its devices, like mobile phones and wireless data cards for laptops in the retail market under its own brand name. This means that Huawei can market its own brand in India, the world’s fastest growing telecom market and will no longer have to depend on local service providers. Until now, operators like Tata Teleservices, Bharti Airtel, and Reliance Communications would buy the devices from Huawei, and put their own brand on them.

In India, Huawei will  target the smart phone market with 20 models priced between Rs.7,000  (US$150) and Rs. 12,000 rupees. All the phones will be built around chipsets from Qualcomm, and 12 of these phones will run the open source Android operating system. The rest of the phones will run the Brew MP operating system from Qualcomm. The phones will be available through retail channels from August 1.

In a market where cost plays a major factor is purchasing decisions, Huawei said it has sold about 5 million devices, including mobile phones and wireless laptop data cards, in India last year. The company has sold about 25 million of these devices so far in India through operators, with handsets accounting for 60 percent of units sold. Riding on the strength of its own brand, Huawei hopes to boost sales by about one million smart phones in the first year by offering full-featured devices at a low prices.

Comparatively, in 2009, Nokia had a 54.1 percent share of the 102 million mobile handsets sold in India, according to research firm IDC India. But lower cost devices from Indian and Chinese brands are fast gaining share in the market, according to analysts.

On Wednesday, India’s Department of Telecom, modified its security rules on telecom equipment and resumed the imports from Chinese telecom operators and equipment vendors. The DoT had banned Chinese telecom equipment manufacturers such as ZTE and Huawei in April this year on security grounds. After severe lobbying by both Chinese equipment manufacturers and Indian telecom companies that need cheap chinese equipment New Delhi has decided to ask service providers to disclose the source code, or computer programs used in such equipment, along with design details. In addition, if security breach is detected after the deployment of the equipment, the vendors will need to pay a penalty of INR500 million per purchase order and 100 percent of the contract value on telecom service providers.

India is not the only country to have pulled Huawei up for security concerns, Motorola last week filed a lawsuit against Huawei, charging that it had obtained confidential information from its former employees. Huawei on Thursday denied the claims, describing the accusations as “groundless.”



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