Huawei Technologies is looking to established, tier-1 carriers in India to ensure future revenue stream, and its change in business strategy comes amid its planned five-year US$2 billion investment in the country.
A report by the Economic Times on Monday quoted Huawei India CEO Cai Liqun as saying: "We have to get more business from tier-1 companies like Bharti Airtel, Vodafone and Idea Cellular, and recover the investment done in the Indian business."
Cai added Huawei India already planned to invest US$2 billion in India over the next five years, "but we cannot guarantee the returns".
The company's move to target tier-1 telcos to secure future revenue was made even as equipment suppliers to Indian mobile phone operators are seeing lower sales. This is due to India's Supreme Court revoking all 122 existing 2G licenses belonging to telcos such as Sistema Shyam and Uninor, both of which are Huawei's clients. The uncertainties in the telecom sector and escalating debt have made telcos less inclined to invest in networking gear, the report noted.
Cai said Huawei's India business has been impacted, but added the company is taking time to optimize operations and improve internal capabilities to be better prepared for future growth. "It is also an opportunity. We optimized our organization by putting more good resources toward tier-1 companies."
According to him, Huawei India will up its engagement with broadband wireless access (BWA) spectrum holders such as Reliance Industries Limited (RIL) and Bharti Airtel-Qualcomm this year.
Although Huawei India competes with rivals such as ZTE and other European companies on price, its long-term strategy will balance price and quality while offering equipment and managed services, Cai noted. Operators in India do not always focus on price but on total operating cost, he explained, noting that poor quality, despite low prices, leads to high customer complaints.
The Indian telecom equipment industry's revenue dropped slightly to US$21.7 billion in 2011-2012, from US$21.9 billion in 2010-2011, the Economic Times reported.