Indian Telecom Tender Excludes Chinese Companies

A telecommunications service provider controlled by the Indian government, has excluded Chinese vendors from a tender for supply and installation of mobile telephony equipment, reflecting India's continuing concern about procuring equipment from Chinese companies.

The notice from Bharat Sanchar Nigam (BSNL) inviting tenders for the roll out of 5.5 million [m] lines of GSM (Global System for Mobile Communications) has specifically invited the Indian operations of Alcatel-Lucent, Ericsson, and Nokia Siemens Networks to bid in the tender.

The last date for receipt of bids is July 22.

Huawei Technologies would have participated in the tender if it was allowed to do so, a spokesman for the company said on Thursday.

Chinese telecommunications equipment vendors like Huawei and ZTE say Indian service providers have been blocked from buying their equipment by the Indian government which is citing security reasons.

Representatives from both companies met Indian government officials last month to convince them that buying from their companies is not a security risk, but the BSNL tender this week suggests that the security concerns about Chinese suppliers are still unresolved.

India and China went to war in 1962, and strained relations over a border dispute between the two countries increased last year.

In May last year, for example, the Indian government ordered BSNL not to place equipment orders with Chinese companies for network deployments in sensitive border areas.

A BSNL spokesman said Thursday that the tender had been structured in line with government orders, though he declined to go into details. In an interview last month with local daily newspaper The Economic Times, BSNL chairman and managing director Kuldeep Goyal said that although Chinese equipment is cheaper, a government directive prevents the company from placing any orders with equipment makers from China, particularly if the equipment has to be installed in service areas that have international boundaries.

The current BSNL tender is for the deployment of GSM networks in the North and Eastern zones, and some of the states covered, such as Jammu and Kashmir, are border states and considered sensitive from a security viewpoint.

The country's Department of Telecommunications (DOT) made it compulsory late last year for Indian service providers to get security clearance from the DOT for equipment and software that they plan to purchase from foreign suppliers.

Huawei and ZTE claim that orders placed with them by service providers have been blocked since the DOT order. A DOT spokesman however said recently that there was no ban on equipment from any specific country, but all equipment orders had to go through a security clearance under the new rules.

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