Mobile firms told to be careful with Chinese equipment

Alarmed at the growing trend of Indian mobile operators placing equipment and network orders with Chinese firms....

Alarmed at the growing trend of Indian mobile operators placing equipment and network orders with Chinese firms,the department of telecommunications (DoT) on Friday advised the players to check this practice in the interest of national security.

DoT secretary Siddartha Behura told the CEOs of private mobile operators on Friday to adopt a policy of self-regulation. According to sources present in the meeting,the companies were advised to broad-base the contracts for telecom equipment,away from the least cost vendors,which often turn out to be Chinese companies. He,however,did not specifically ask them to stop deploying Chinese equipment in sensitive locations like border and remote areas.

The government move comes shortly after it put restrictions on state-owned BSNL from placing equipment orders with Chinese vendors. Since the company has only 15 per cent market share of GSM services,the government felt it was prudent to bring the private operators under some restrictions,albeit softly.

The operators have been asked to come out with guidelines in this regard,which would be discussed with the DoT in the next fortnight. While no amendments would be made in the licence conditions,a set of guidelines would be issued after broader consultations.

The government has not placed any restrictions on Chinese vendors. We had discussions with the government and were asked to come out with guidelines,which would be discussed with the government in another meeting. We have been assured that whatever would be done by the government would be in consultation with the industry, S C Khanna,secretary-general,Association of Unified Service Providers,said. Telecom service providers do not manufacture any equipment in India,be it optical transmission

solutions,mobile terminals or software solutions. They,instead,source these from vendors.

Currently,Chinese vendors like Huawei and ZTE occupy about 20 per cent of the network equipment market in the country. But their share is growing at a fast clip,having bagged most new contracts from existing and new service providers. The reason for this,industry sources said,was cost-competitiveness of these companies,which offered network equipment at almost one-fourth the cost of US and European vendors.