China's Huawei offers to share source code

[SinoIndusFriendship]

whatsoever, this is a lose-lose situation.
for india and indian consumers have to pay more for its telcom infra. this may slow its telcom infra development progress and hurts india as whole in long run.
for Huawei or ZTE lose indian market.
personally i dont feel much abt it. to me huawei is just another telcom company like cisco,at&t etc. they sometime win sometime lose. it has not much effect on china.

Last year's revenue was just 9% of Huawei and ZTE's total revenue. It is significant but still only a minor component. Secondly, revenues may be 2billion, but what was the cost/expense? It's well known it is not easy to do business in India (with all the kickbacks, mafia, corruption), so the profit -- if any -- may be very minimal.

Lastly, GOI is very unlike to blackmail any of the American or European companies much more. When the lowest cost, best performance competitors (Huawei & ZTE) exit the picture ---> the remaining American & European companies will have a field day, as the cost pressure has been removed. Likely they'll demand India to reimburse their "cost of doing business" (i.e. kickbacks, corruption, etc), as any large company is well aware of.

Huawei & ZTE may lose out, but the biggest losers will be Indian Telecom companies which will pass the higher costs to consumers, and GOI which whom will lose lots of revenue/tax.

 

[Merilion]

You are seriously overvaluing , Huawei or ZTE to the Indian market

lose or gain of one company wont even make a dent.

Telecommunication is one of India's most competitive fields , with an ongoing price war where everyone is trying to undercut the other.
That wont change any time soon , with already as many as 500 million sim's in service

If you were talking fixed landlines then i might have agreed with you.

i might be but i seem read somewhere that huawei & ZTE has above 20% market share in india. i aslo heard why india telcom companies want to buy from huawei & ZTE is mainly due to their lowest price and better performance. The price huawei offering is 1/3 cheaper than their european/US counterparts? by logic if the lowest price competitor exit from the market the market price will only go up. With the quit of the cheapest suppliers from the market do you think the ongoing price war can sustain how long? at the end of day who will bear the higher cost? and dont forget this is infrastructure which a lot of other developments depend on.

 

[Merilion]

Last year's revenue was just 9% of Huawei and ZTE's total revenue. It is significant but still only a minor component. Secondly, revenues may be 2billion, but what was the cost/expense? It's well known it is not easy to do business in India (with all the kickbacks, mafia, corruption), so the profit -- if any -- may be very minimal.

9% is quite significant for any company.

Lastly, GOI is very unlike to blackmail any of the American or European companies much more. When the lowest cost, best performance competitors (Huawei & ZTE) exit the picture ---> the remaining American & European companies will have a field day, as the cost pressure has been removed. Likely they'll demand India to reimburse their "cost of doing business" (i.e. kickbacks, corruption, etc), as any large company is well aware of.

Huawei & ZTE may lose out, but the biggest losers will be Indian Telecom companies which will pass the higher costs to consumers, and GOI which whom will lose lots of revenue/tax.

very well said

 

[Mauryan]

Last year's revenue was just 9% of Huawei and ZTE's total revenue. It is significant but still only a minor component. Secondly, revenues may be 2billion, but what was the cost/expense? It's well known it is not easy to do business in India (with all the kickbacks, mafia, corruption), so the profit -- if any -- may be very minimal.

Lastly, GOI is very unlike to blackmail any of the American or European companies much more. When the lowest cost, best performance competitors (Huawei & ZTE) exit the picture ---> the remaining American & European companies will have a field day, as the cost pressure has been removed. Likely they'll demand India to reimburse their "cost of doing business" (i.e. kickbacks, corruption, etc), as any large company is well aware of.

Huawei & ZTE may lose out, but the biggest losers will be Indian Telecom companies which will pass the higher costs to consumers, and GOI which whom will lose lots of revenue/tax.

Probably you were not aware of the new policy from GOI w.r.t infra development.
any company that plans to place a tender and wins any deal has to bring its production lines to India with in 3 years of signing the deal.And all the relevant equipment needed to supply for its customers has to be supplied from its Indian manufacturing units(where Indians are making them)
Never mind... Huwaei or ZTE showing attitude? they will be loosers sololy,but neither India nor its telecom operators.
There is a big turf war regarding the telecom equipment.Many companies from cisco,nokia,seimens,.... have been in competition for them.And these companies already have their R&D and manufacturing units in India.All they need is increase the production capacity,which can be done easily with no hassle.

You know what? both the end users (be it cellphone users or broadband users will be offer uttered security when used western equipment).Just take it that Chinese are unworthy and untrusted(as their past trumpets about it).Trusting on a chinese OEM is like inviting risks.

Honestly, this only deal will send some serious messages to China from GOI POV.So far Chinese trade practices were 100% unfair towards India and India was reluctant to take up the issue seriously.Now that the pot is heating up and water vaporising,Soon the heat will be passed on to other moecules(means other such cases).
Donno what your nationality is,but keep it in mind that every one can play hard ball and teach a lesson

 

[Mogambo]

The so called biggest chinese companies are trying everything to get business from India. This is more then enough to show the mirror to those who talk about the best super power ever china. It shows that china need India.

As we are growing very fast and our financial muscles are growing it will be beneficial to both the countries to cooperate.

Otherwise we will not loose anything we will give order to companies from other countries.

 

[Mogambo]

Last year's revenue was just 9% of Huawei and ZTE's total revenue. It is significant but still only a minor component. Secondly, revenues may be 2billion, but what was the cost/expense? It's well known it is not easy to do business in India (with all the kickbacks, mafia, corruption), so the profit -- if any -- may be very minimal.

Lastly, GOI is very unlike to blackmail any of the American or European companies much more. When the lowest cost, best performance competitors (Huawei & ZTE) exit the picture ---> the remaining American & European companies will have a field day, as the cost pressure has been removed. Likely they'll demand India to reimburse their "cost of doing business" (i.e. kickbacks, corruption, etc), as any large company is well aware of.

Huawei & ZTE may lose out, but the biggest losers will be Indian Telecom companies which will pass the higher costs to consumers, and GOI which whom will lose lots of revenue/tax.

you don't know the abc of the free market or Indian economy.

India is world's 2nd largest and also the fastest growing telecom market in the world.

Every telecom company no matter its Indian or MNC are doing everything to grab the market.

So even if the cheap chinese products will be not available and telecom companies have to buy costly equipments then also they will not pass the burden to the customer.

Propaganda busted

1. Indian consumes will not affected as telecom companies will take the burden if anything is there.

2. Indian govt.'s tax will not affected at all, from where u get this??

3. Telecom companies can easily buy some costly stuff as they will have more quality ad the companies can easily recover heir cost in long run. The revenue of companies will be affected instead of US$ 2 billion they can get US$ 1 billion profit so why anyone care??

4. There was world before china and the world will be there even without china.

 

[Martian2]

Donno what your nationality is,but keep it in mind that every one can play hard ball and teach a lesson

That is an accurate assessment of the India-Huawei-ZTE-China situation.

Regardless of WTO rules, India wants the high-paying manufacturing and research & development jobs associated with the telecoms sector. I think China can accommodate India in providing more telecoms manufacturing and R&D jobs in India.

However, the real worry on the Chinese side is whether Huawei and ZTE can keep their technological secrets from India. India has already applied enough pressure to force Huawei to offer its source code. It is apparent that India's hardball strategy is to use the lure of its large telecoms market to eventually learn Huawei's and ZTE's hardware and software telecoms secrets.

The smart thing for China to do is to walk away and let India pay a 50% higher price (see my math below) for Western telecoms gear. However, just like in the West, we are seeing Huawei's and ZTE's powerful political influence in the Chinese government. Huawei and ZTE are asking China to take a gamble. This is a risky road, but Huawei and ZTE are both multibillion-dollar companies with broad political influence.

We won't know for ten to twenty years whether Huawei and ZTE were successful in protecting their secrets from the Indian government and industry. In the future, if we see a smaller Indian version of Huawei and ZTE then I think we can say that Huawei and ZTE sacrificed their long-term gains for short-term profits.

India security jitters rattle growing China ties - Reuters -

"A ban on China's telecoms equipment, which costs about one-third less than Western gear, would raise the cost and slow the build out of mobile networks in India.

India is the biggest overseas market for ZTE, where its market share is about 15 % and it sold USD 750 million worth of equipment last year. Huawei, the global No. 2, sold about USD 1.4 billion in equipment in India in the year to March 2009."

Math calculation:

Let's say that "Western gear" costs $90. "China's telecoms equipment, which costs about one-third less than Western gear," would cost $60.

If India had to stop buying "China's telecoms equipment" and replace it with "Western gear" then the price increase is 50% (e.g. ($90-$60)/$60 x 100 = 50%).

 

[deepak75]

^^^^^ yeah but you are clearly missing out on the core reason. Once any company even if it is European or US will start manufacturing in India, then the cost will automatically come down. So there should not be any difference worth considering between a Chinese imported solution or a solution that is manufactured in India by any European or US company.

 

[Martian2]

^^^^^ yeah but you are clearly missing out on the core reason. Once any company even if it is European or US will start manufacturing in India, then the cost will automatically come down. So there should not be any difference worth considering between a Chinese imported solution or a solution that is manufactured in India by any European or US company.

I disagree. In theory, you may be correct to a limited extent. However, American and European companies are notorious for protecting their profit margins and generating shareholder value. Also, the importation of expensive Western manufacturing equipment, replacement parts, components, and salaries for Western plant technicians, engineers, and managers mean that a Western telecoms plant in India will be far more expensive than a Chinese version.

I've heard many similar arguments here in the United States and it never turns out that way. For example, they promised us lower prices from increased competition and greater efficiency in proposing to deregulate the electricity market. Instead, they are now charging us a new "distribution fee" in addition to the old "generation charge." To make a long story short, I am paying twice to thrice the monthly bills for electricity.

Anyway, I don't think that India can force an American or European company to manufacture in India under WTO rules. India has singled out Huawei and ZTE based on the pretext of "security concerns." This dirty trick/hardball tactic won't work and do not apply to American and European telecoms companies.

 

[Mogambo]

even if we have single out chinese companies why do chinese companies care?? why don't they get out of India??

china the all mighty superpower capable of invading hole world and ur economy is the most strong as troller says so why care?

As recent survey and poll says the chinese don't want friendship with China we are justified to single out chinese companies.

 

[sohan]

This is what happens when you don't have Indian companies that can manufacture such gear.

 

[Martian2]

even if we have single out chinese companies why do chinese companies care?? why don't they get out of India??

china the all mighty superpower capable of invading hole world and ur economy is the most strong as troller says so why care?

As recent survey and poll says the chinese don't want friendship with China we are justified to single out chinese companies.

Isn't it obvious why Huawei and ZTE care? Why does any company care? They care about their profits. Chinese companies should not be excluded from India because India signed an international treaty called the WTO that regulates international trade in merchandise goods.

India is not honoring its commitment to the WTO rules. Huawei and ZTE want to continue and profit from their hard-built Indian telecoms businesses. India is using a blatantly false "security concern" pretext to extract economic benefits from China's Huawei and ZTE.

India is not really serious about the "security concern" because if it were truly such an important issue then India would have outright banned Huawei and ZTE. Instead, India is playing a nasty game of extracting high-paying manufacturing and R&D telecoms jobs from Huawei and ZTE and pursuing a national industrial policy of extracting Huawei's and ZTE's most important technological secrets, including source code, for telecoms gear.

We are witnessing economic warfare and India is engaging in brinksmanship against WTO rules on a false pretext. It's ugly, but it's what nations do. However, it would be self-deception to claim otherwise. The facts are pretty straightforward. India doesn't really want to pay 50% more for telecoms equipment. India is milking the "security concern" angle to extract maximum economic and technological benefits from Huawei and ZTE.

This is what happens when you don't have Indian companies that can manufacture such gear.

Precisely. Use the "security concern" leverage to force Huawei and ZTE to divulge as many of their technological secrets (e.g. source code disclosure is just the beginning; eventually India will demand equal proof on the hardware side; followed by demand for similar proof on the system integration; etc.) as possible. Take all of the knowledge and technological secrets gathered from Huawei, world's global #2, and ZTE and then use it as the technological base for India's research and development of its own telecoms companies that will eventually compete with Huawei and ZTE.

 

[sohan]

Isn't it obvious why Huawei and ZTE care? Why does any company care? They care about their profits. Chinese companies should not be excluded from India because India signed an international treaty called the WTO that regulates international trade in merchandise goods.

India is not honoring its commitment to the WTO rules. Huawei and ZTE want to continue and profit from their hard-built Indian telecoms businesses. India is using a blatantly false "security concern" pretext to extract economic benefits from China's Huawei and ZTE.

India is not really serious about the "security concern" because if it were truly such an important issue then India would have outright banned Huawei and ZTE. Instead, India is playing a nasty game of extracting high-paying manufacturing and R&D telecoms jobs from Huawei and ZTE and pursuing a national industrial policy of extracting Huawei's and ZTE's most important technological secrets, including source code, for telecoms gear.

We are witnessing economic warfare and India is engaging in brinksmanship against WTO rules on a false pretext. It's ugly, but it's what nations do. However, it would be self-deception to claim otherwise. The facts are pretty straightforward. India doesn't really want to pay 50% more for telecoms equipment. India is milking the "security concern" angle to extract maximum economic and technological benefits from Huawei and ZTE.



Precisely. Use the "security concern" leverage to force Huawei and ZTE to divulge as many of their technological secrets (e.g. source code disclosure is just the beginning; eventually India will demand equal proof on the hardware side; followed by demand for similar proof on the system integration; etc.) as possible. Take all of the knowledge and technological secrets gathered from Huawei, world's global #2, and ZTE and then use it as the technological base for India's research and development of its own telecoms companies that will eventually compete with Huawei and ZTE.

Mate, Indians WISH the GoI was so competent that they could pull off or even try to pull off such a feat.

It's not like Huawei got where they are without doing some naughty business and technology theft either.

 

[Martian2]

Mate, Indians WISH the GoI was so competent that they could pull off or even try to pull off such a feat.

It's not like Huawei got where they are without doing some naughty business and technology theft either.

I never suggested otherwise. However, this behavior from the Indian government is new and very un-Indian. Oh well, so much for pacifist Gandhian India. I like the old India better. I think India has decided that it wants to become more like China.

I was surprised by the Indian government's decision to "squeeze" Huawei and ZTE. India is showing an economic ferociousness and determination that I don't believe that I've seen before.

In the past, China played hardball with U.S. companies. However, Chinese action was entirely legal. The U.S. made a serious error in not writing more conditions for China's entry into the WTO. You can't complain if you failed to foresee the rapid growth and importance of China's domestic market and government procurement.

On the other hand, India is playing hardball with China and taking it one step further. India found a public-relations weakness in the supposed PLA roots of Huawei. Using this PLA specter and the absurd ghost of 1962 (which was 48 years ago and happened before most of us were born), India has decided to ignore the WTO obligations and proclaim that Huawei and ZTE may have to be banned on "security concerns."

I think I'll call this the Indian variation of the traditional Chinese "hardball" strategy. In this Indian variation, Huawei and ZTE will have to keep bending over and satisfy a long stream of Indian demands.

In conclusion, India is doing to China what China did to the U.S. However, the key difference is that India seems to be "cheating" and violating WTO rules. This is different from the upright Chinese, who never gave the Americans an extra inch than what was called for in the WTO accession obligations. Come on India, remember Gandhi!

 

[Mogambo]

@ Martian2

What WTO or ethics your are talking about? china creates trade barriers, restrictions, devalue its currency etc. etc. its a fact.

BTW, this incident shows the way how India should tackle chinese menace.