Chinese Telecom Gear Maker ZTE Explores Technology Transfer And Joint Venture In India Amid Govt Scrutiny: Report

Chinese telecom network provider ZTE, which is partially owned by the Chinese government, is reportedly in discussions with Indian companies regarding the transfer of technology and designs, and forming a joint venture.

This comes as ZTE faces a freeze on its business in India due to strict security and regulatory checks imposed by the government.

ZTE, along with Huawei, has been negatively affected by the border tensions between India and China.

The company reportedly believes that partnering with an Indian company will help drive in the “critical trust factor” into its operations.

By doing so, ZTE aims to continue servicing existing telecom and network companies while also expanding its business.

ZTE has already started discussions with some Indian manufacturers for a potential joint venture in the telecom and network business.

“ZTE has begun conversations with some credible Indian manufacturers who it is looking to partner with, through a joint venture, for telecom and network business. The company is ready to transfer technology, engage in research and development and design, while the Indian partner would need to make investments for the manufacturing,” a source was quoted as saying by Times of India.

Some top Indian contract manufacturers have already been approached by the Chinese telecom gear maker.

“These talks are at an initial stage, and may or may not materialise into a joint venture,” the source added.

Huawei and ZTE, once prominent players in India's telecom network and equipment industry, have now been marginalised due to the government's cautious approach towards allowing gear only from 'trusted' sources.

This decision stems from concerns over potential espionage and cyber attacks, a concern shared by many Western countries.

The government has established checks and regulations for the deployment of telecom equipment across the networks of private operators like Reliance Jio, Bharti Airtel, and Vodafone Idea.

Chinese companies are only allowed to supply equipment for maintenance or upgrades of existing networks originally set up by them.

For advanced networks such as 5G, mobile operators have turned to European companies like Ericsson and Nokia, as well as Korean brand Samsung.

State-owned BSNL and MTNL, who heavily relied on Chinese telecom networks (particularly ZTE) earlier, have now transitioned to a fully indigenous stack for their 4G upgrade.

They are utilising a network developed by TCS, a subsidiary of Tata, and Tejas, where the core is being provided by the government’s C-DOT.