Nokia EXCLUSIVE set to replace Huawei equipment in parts of Vodafone Idea’s Indian network – sources

Nokia’s logo and ticker are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 21, 2018. REUTERS/Brendan McDermid/

STOCKHOLM/MUMBAI, March 11 (Reuters) – Nokia (NOKIA.HE) is in talks to replace Huawei’s (HWT.UL) 4G radio equipment from parts of Vodafone Idea’s (VODA.NS) telecommunications network in India , in one of the biggest swap deals for the Finnish company, three sources familiar with the matter said.

The deal will see Nokia deploy 12,000 5G-ready radio sites and 4,000 small cells across Vodafone Idea’s network in India’s capital Delhi, the sources said.

Telecom operators in India have reduced their reliance on Huawei after some security concerns and Vodafone Idea’s move is a blow to Huawei’s prospects in the country, telecom experts said, adding that more operators could choose to replace the Chinese company as a supplier.

Huawei said the company does not comment on specific projects. Nokia declined to comment, while Vodafone Idea did not respond to requests for comment.

Several countries, including the United States, Britain and Sweden, have blocked carriers from using equipment made by Huawei for security reasons. Huawei denies this is a security risk.

“Unfortunately, there is no choice but to leave Huawei due to security concerns and government pressure,” said Vivekanand Subbaraman, telecommunications analyst at Ambit Capital in India.

“These concerns are not something you can wish to eliminate.”

In January, Vodafone Idea agreed to convert government dues for airwave use into shares, giving the Indian state a 35.8% stake in the company.

Vodafone Group (VOD.L) holds 28.5% and Aditya Birla Group 17.8%.

Although India has not banned Huawei, the country has not named any Chinese companies, including Huawei, among the list of approved vendors to conduct 5G trials. India is expected to auction 5G spectrum later this year. Read more

In a swap deal, a carrier switches existing provider and Nokia had previously replaced Huawei equipment with carriers including BT, Orange Belgium, Proximus in Britain, Belgium and Luxembourg respectively.

Huawei supplies telecommunications equipment to both Vodafone Idea and Bharti Airtel (BRTI.NS) and the former is one of its biggest customers in India. Bharti Airtel also counts Ericsson (ERICb.ST) among its suppliers.

“(The) Indian market is very complex with many challenges and we are closely monitoring developments in this market,” Huawei said.

Huawei holds 29% of the global telecommunications equipment market, followed by Nokia and Ericsson at 15% each, according to research firm Dell’Oro.

Nokia’s equipment will allow Vodafone Idea to run 2G, 3G, 4G and 5G networks from the same platform and the rollout could start from next month, the sources say.

Reporting by Stockholm-based European tech and telecoms correspondent Supantha Mukherjee and Mumbai-based Abhirup Roy Editing by Mark Potter

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