Huawei, ZTE fail to keep flock together as business takes a plunge
“ZTE’s workforce shrank close to 150 employees while Huawei has nearly 200 employees currently,” an industry source told ETTelecom, adding that the impact of recent restictive policies and absence of fifth generation (5G) business eventually discouraged its workforce.
NEW DELHI : Employee base of the Indian units of Chinese telecom gear makers ZTE Corporation and Huawei Technologies continue to tumble, with a sharp headcount reductions in the last two years as the two companies fail to secure new business following scrutiny and tightened procurement rules.
“ZTE’s workforce shrank close to 150 employees while Huawei has nearly 200 employees currently,” an industry source told ETTelecom, adding that the impact of recent restrictive policies and absence of fifth generation (5G) business eventually discouraged its workforce.
In 2020, ZTE and Huawei had close to 1,000 and 1,500 emploees.
Last year, the government introduced a directive concerning national security with a mandatory trusted ource adherence. The two Chinese companies are yet to secure compliance from the National Security Council Secretariat (NSCS)-driven platform.
The centre has also come up with a rule that restricts equipment procurement from counties sharing a border with India, making a clear indication to China. The norms, however, apply to public to public sector companies and agencies while top two private sector customers–Bharti Airtel and Vodafone Idea–towing the government line after heightened Sino-Indian border tensions, restrained from issuing any fresh purchase orders.
Both Shenzhen-based telecom companies have been servicing prior commitments to existing customers by way of annual maintenance contracts (AMC) only.
ZTE continues to engage with state-run Bharat Sanchar Nigam Limited (BSNL) with service maintenance for Phase 7,7+ and Ph 8.4 network expansion, in addition to managed service for Vodafone Idea (Vi) for microwave and optical line terminal (OLT) business.
Ren Zhengfei-founded Huawei pockets nearly Rs 500 crores from annual contracts it had entered with Bharti Airtel and BSNL.
Huawei, meanwhile, has admitted that the company’s “operations have been impacted” during the last couple of years.
“In the past two years our operations have been impacted by factors and we have been optimizing our resources as per business requirements. While we heve been facing a lot of challenges and turbulence of regulations, we carry out our operations only within the ambit of all the laid government policies, guidelines and regulations,” Huawei in a statement to ETTelecom said.
ZTE did not respond to emailed queries despite reminders, while Huawei India added that it has countinuously put compliance first and foremost priority.
“Despite the challenges, we are keeping adequate resources to serve our customers and will remain committed to coutinue our best services to their legacy network,” Huawei added.
However, most of the employees quit due to lacklustre business operations coupled with the lack of clarity from the management, and landing up with India’s homegrown companies.
Over the past few years, the business environment for Chinese companies remains tough with o fifth generation or 5G network order from any of the two customers who have signed multi-million dollar deals with European rivals–Ericsson and Nokia.
India’s largest Reliance Jio, a profitable and cash-rich telco, deploying 5G standalone (SA) network on coveted 700 MHz spectrum band, also recently awarded “much-sought after” multi-year contracts to Ericsson and Nokia, arch rivals to ZTE and Huawei
Back in 2018, the situation started turning hostile for the two companies when the telecom department (Do T) asked service operators to align with technology vendors excluding both ZTE and Huawei, to trial out 5G-centric use cases on the experimental spectrum.
Since then, both the Chinese companies failed to secure any business except a couple of telecom infrastructure expansion deals from existing customers — Bharti Airtel and Vodafone Idea.
This has come on the backdrop of the US-driven campaign cornering Huawei for using network backdoor.
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