No Respite for Chinese Vendors

6:55 AM -- In a clear contradiction of its official stand, the Indian government is believed to have compiled a list of Chinese and Israeli telecom and IT systems vendors that, at least temporarily, are not allowed to supply India's service providers. (See India's DoT Denies Blanket Ban on Chinese Gear.)

According to The Economic Times, India's Intelligence Bureau has compiled a list of 26 companies, nearly all from China, that are barred from supplying their products until new technology security procedures, proposed earlier this year, are put in place. (See India's Source Code Bombshell and Indian Reprieve for Chinese Vendors .)

The names include Huawei Technologies Co. Ltd. , ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), Lenovo Group Ltd. (Hong Kong: 992), UTStarcom Inc. (Nasdaq: UTSI), and Comverse Inc. (Nasdaq: CNSI)

Security issues regarding the major Chinese vendors have been ongoing for months, with Huawei and ZTE seemingly most affected. (See BSNL Blocks Huawei, ZTE Bids, Huawei Seeks Talks Over Indian Lockdown, and ZTE Embarks on Indian Charm Offensive.)

According to The Economic Times report, hundreds of purchase orders involving the 26 companies have been held up by the Indian authorities, while orders for technology from such vendors as Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Nokia Networks have been approved.

Of major concern to Huawei and ZTE will be the potential impact the temporary ban will have on 3G equipment orders, as the seven carriers that won spectrum in the recent auction will be planning the construction of their new networks. (See India's 3G Auction Ends, Raises $14.6B.)

ZTE had already stated that it was targeting a 15 percent share of the Indian 3G equipment market this year alone. If the current situation prevails, that target will be missed, and a clear advantage will be handed to the Western vendors.

— Gagandeep Kaur, India Editor, Light Reading

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