Chinese telecom equipment giant Huawei Technologies Co. has radically slashed its 2012 outlook for its India business, saying that it expects sales to be flat rather than grow by 40%.
This is because India's telecom operators have cut spending due to slowing industry growth, regulatory uncertainties and spectrum issues, said Cai Liqun, chief executive of Huawei India.
There have also been "some real challenging times with regard to cancellation of licenses of some of our telecommunications customers," Mr. Cai told Dow Jones Newswires Thursday, referring to a February court decision ordering the cancellation of 122 telecom licenses due to alleged corruption in their allocation.
A slowdown in India's once-booming telecommunications industry -- the world's second-largest after China by number of subscribers -- has dealt a big blow to global equipment manufacturers.
Companies such as French-American firm Alcatel-Lucent, Sweden's L.M. Ericsson Telephone Co., Finnish-German joint venture Nokia Siemens Networks and China's ZTE Corp. have all been hit by slowing investments by wireless operators in India.
The importing of Chinese telecom equipment has come in for criticism in India because it accounts for a sizeable chunk of New Delhi's trade deficit with its larger neighbour.
In the fiscal year through March 2012, India's trade gap -- a source of friction between the two countries -- with China jumped 42% to nearly $40 billion.
In the year ended March 31, 2011, a total of $6.7 billion of Chinese telecom equipment was imported into India, including cordless phones, cellphones and cellular base stations. The import figures for the year through March 2012 weren't immediately available.
Shenzhen-based Huawei earns nearly three-fourths of its revenue in India from the sale of network equipment. The rest comes from selling consumer devices such as smartphones and television set top boxes, and from providing networking products to businesses.
The company's clients include the Indian units of Norway's Telenor ASA and Russia's Sistema JSFC, both of which lost their licenses because of the February Supreme Court order on the allocation of bandwidth.
However, Mr. Cai expects the situation to stabilize after the bandwidth is
...Source: http://www.totaltele.com/view.aspx?ID=476151
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