Bharti Airtel Huawei contract- Is short term benefit important than long term national interest?

Finance    12-Mar-2021   
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Bharti Airtel the second largest mobile network operator not only in India but also in the world is in news for all the wrong reasons. A new wireline network contract of INR 300 crores has been given by Bharti Airtel to Huawei of China. This comes at a time when Airtel is in the process of requesting proposals from companies like Nokia and Ciena for replacing Huawei from its current National long-distance network. This contract looks like a mundane business transaction. Then why the hoopla?
 

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Normally, when a company gives contract to any vendor what are the factors that it takes into consideration? Requirement of the company, the product offering by the vendor and its suitability to meet the requirements of the company, quality and finally the price. Obviously, the vendor which ticks all the right boxes is awarded the contract.Bharti Airtel is a private sector Organisation. The aim of any company is to increase market share and maximise profitability. To increase profitability, if the company is not able to increase the price of its products, which Bharti Airtel was not because of competition from Jio, it looks at reducing its costs to maintain its position on the growth curve. Bharti Airtel has been booking heavy losses after Jio’s blitzkrieg launch in 2016. 
 
Jio was launched by offering free internet to a billion people. It led to a tumultuous rollercoaster in the telecom sector. Till Jio came into the picture, the telecom space was ruled by Vodafone Idea and Airtel. But their supremacy was challenged and overthrown by the richest man in Asia. Vodafone is still trying its best from getting drowned by the Jio Tsunami. Bharti Airtel is in a better position than Vodafone. It has added maximum wireless subscribers for the fifth straight month in February 2021w as per data published by TRAI. As far as wireline subscribers are concerned, Reliance Jio has been adding the maximum subscribers mostly because of its fibre connectivity through out the country. Airtel has approached Huawei for building up infrastructure for this wireline network to catch up with its competitor. The reason being Huawei's pricing strategy which has been to offer lower prices than most of its competitors, without pricing too low to put a question mark on the quality of its products and appearing to be another low quality cheap Chinese provider. That is why like Airtel, it was preferred by most of telecom operators around the world.
 

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But many countries have described Huawei as being a spying agent of the Chinese government. It’s products intentionally contain security features that aid the Sino state in espionage.  This possesses an objectionable risk to the nation’s security, crucial infrastructure, privacy, and human rights. Countries including US, UK, Australia, Canada and many more EU countries have already banned many Chinese equipment manufacturers including Huawei and ZTE from providing 5G gear in their countries.
 
Tech major like Apple, facebook, Google have alleged that Huawei pursued information about their trade secrets and have advocated blanket ban on Huawei keeping in mind national security concerns. Former Google CEO and current head of National Security Commission on Artificial Intelligence, Eric Schmidt in a recent interview to CNN estimated that China was about 10 times ahead of US and this dire situation was already a national level emergency. He believed this to be a threat to US security and therefore he urged that focus should shift on Research and Development in field of artificial intelligence in federal government and international security. He like many around the world have concerns whether these technologies are built in China, they will not necessarily follow privacy rules or ethics of other countries.
 
The US has described Huawei as Beijing’s backdoor access to foreign markets and an “unacceptable” risk to national security, critical infrastructure, privacy, and human rights. Huawei’s face recognition software patents mention of a system that identifies people who appear to be of Uighur origin among images of pedestrians. This software has been used to send alerts to Chinese government authorities where members of Uighur community are identified as was reported by a Washington Post report. In a clear violation of fundamental human rights, more than twelve million Uyghurs are detained in concentration camps because of their ethnic identity. The Chinese state defines these camps as re-education camps. The Uighurs are being used as forced labour and their women forcibly sterilised.
 
In June 2020, Chinese troops staged an unprovoked attacked on Indian Army in Galvan Valley. It resulted in a bloody skirmish. 20 Indian soldiers attained martyrdom fighting for our motherland. Their supreme sacrifice can never be forgotten.
 
 
As private sector enterprises working in a free economy, where the Prime Minister himself is lauding the role of private enterprises for growth, wealth creation and distribution, it is the duty of these enterprises to uphold the security and sanctity of our nation above their private gains. This holds great importance considering the repressive regime of our communist neighbour, where communication (internet) and most enterprises are state controlled. The nation which has given us freedom of enterprise to pursue our dreams without any government intervention has always to be placed above the rest. Short term gains should not overshadow the bigger purpose of national security, human rights, and privacy. Sunil Mittal, the founder of Bharti Airtel, a first-generation entrepreneur whose father was a Rajya Sabha member from Punjab surely is not a man unaware of his responsibilities as an Indian first and then of as Chairman of a telecommunications company.
 
It cannot always be left to the government only to take corrective action. The government on its part is in the process of setting up a committee to clear equipment, gear and 5G infrastructure to protect India’s national security interest. If his company has overlooked its duties, it is apparent that we as subscribers, investors, shareholders make sure it amends the decisions which are not right in the national interests.
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