Vi signed Huawei pact in Jan-Mar period

Vodafone Idea awarded an “add-on” contract worth `400-450 crore to Chinese gear maker Huawei for wireless and wireline network upgradation just before the March 10 government notice amending telecom licenses mandating the use of equipment only from trusted sources from June 15, 2021, sources familiar with the deal said.Chinese tech companies have been under strict scrutiny after the two sides had a border stand off in the upper regions of the Himalayas in Ladakh.“The new business includes wireless and wireline upgradation including microwave and transport network along with software upgradation. The order was given in March alongside the Airtel-Huawei national long-distance deal,” one of the sources quoted earlier said.However, a wary Huawei has been fulfilling only limited equipment deliveries as the Indian telco already owes some `850 crore to the Chinese vendor, people familiar with the matter said.Vodafone Idea and Huawei denied any new contract signing between the two sides this year. But sources said the latest contracts were not new ones, but additional ones for upgradation in circles where Huawei is the existing supplier and were not for core areas of the network.Another person in the know said the additional business was given to Huawei just weeks before the Department of Telecommunications’ (DoT) notice to amend telecom licenses for security reasons. The government's move is widely believed to be the first step to ensure that Chinese equipment majors like Huawei and ZTE are not included as telecom vendors at a time when the sector is poised for 5G roll out. The two have been kept out of 5G trials in India.“The contracts given by Airtel and VIL relate to an upgrade of existing equipment in the circles where Huawei is an existing vendor/provider. It was important for operators to allocate this contract before the government came out with the list of trusted vendors so that they could future proof their networks in circles where Huawei is the vendor,” said Ashwinder Sethi, a principal at consulting and analyst firm Analysys Mason.However, the gear vendor is supplying only against limited purchase orders. “Huawei doesn’t want more money to get stuck with Vodafone Idea due to its current financial situation. They are delivering against small purchase orders as and when VIL clears some payment for previous orders,” the first person said.

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