Government backtracks on banning Chinese telecom equipment

Having met with stiff opposition from mobile operators on its move to ban them from buying Chinese telecom equipment, the government has scaled down its proposal and asked the country's top mobile operators to adopt a policy of self-regulation in sourcing telecom equipment.

The government's proposed ban seemed to be specifically targeted at two Chinese companies, Huawei and ZTE. But in a meeting called by the Department of Telecommunications on Friday to discuss the issue, both GSM and CDMA players told the government that a ban on these vendors would be detrimental to their business, as most operators have a procurement deal with either Huawei or ZTE.

Telecom service providers do not manufacture any equipment in India, but source all their hardware and software needs from vendors. India's Loop Telecom has tied up with ZTE for its GSM rollout in India, while Reliance Communications has outsourced its GSM network management to Huawei. Buying equipment from Western suppliers could make their businesses unviable, they reportedly said.

Now, operators like Bharti Airtel, Reliance, Vodafone and Idea have been asked to come out with guidelines on sourcing equipment. "We have agreed that security norms for the sector need to be tighter. After consultations with the industry, the government will issue fresh security-related guidelines," The Economic Times quoted telecommunications secretary Siddarth Behura as saying.

In what seems to be a further loosening of the noose, the report quotes two unnamed sources as saying that the onus has now been shifted to the equipment suppliers, who must register with the DoT, agree to be monitored by security agencies, and obtain clearance from the home ministry.

"The government has not placed any restrictions on Chinese vendors," S C Khanna, secretary-general, Association of Unified Services Providers, told the Financial Express. "We have been assured that whatever would be done by the government would be in consultation with the industry."