India's DoT Denies Blanket Ban on Chinese Gear

Department of Telecom denies across-the-board ban on purchase of Chinese equipment, but some procurement processes are being blocked

April 30, 2010

3 Min Read
India's DoT Denies Blanket Ban on Chinese Gear

India's Department of Telecommunications has responded to claims it issued a "Don't Buy Chinese" order to the country's telecom operators by saying there's no across-the-board ban on the purchase of Chinese equipment.

The DoT was understood to have issued a broad ban on the purchase of equipment from Chinese companies -- including, but not limited to, Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- because of potential security concerns. (See India Watch: Vendor Lockdown.)

But DoT spokesman Satyendra Prakash tells Light Reading Asia that "there is no blanket ban on Chinese equipment. It is on a case-to-case basis. Whenever the operators purchase equipment they need to get security clearance from the Ministry of Home Affairs."

While the DoT hasn't issued a sweeping embargo, some operators have been told by the Department to hold off on purchases from Chinese vendors. Market leader Bharti Airtel Ltd. (Mumbai: BHARTIARTL), for example, has confirmed that it has received a letter from the DoT clearly asking it not to buy technology from Chinese companies. Huawei is one of its suppliers.

But startup Uninor , another user of Huawei technology, says it hasn't seen such a letter. (See Unitech Turns to AlcaLu, Huawei.)

"We haven’t received any such communication from DoT. We have got a letter giving out new processes and procedures for purchasing equipment, which we are following. This letter basically gives out guidance about security clearances," stated Rohit Chandra, Uninor's executive VP of operations, on the sidelines of a press conference today about a new service launch.

It's possible that only those companies that have made recent, new applications to purchase certain types of equipment from Chinese manufacturers might have received notification from the DoT, but there is currently no official explanation why some companies have received requests from the DoT regarding the procurement of Chinese equipment and others haven't.

The issue of procurement restrictions is set to be taken up by the Cellular Operators Association of India , but the association says it can't comment until it has studied the issue.

While ZTE has declined to comment on the situation, Huawei issued a statement today saying it hadn't received any "official communication on this matter. Nevertheless we have read media reports and are deeply concerned and surprised to know about this development. Huawei India is currently evaluating and understanding the latest development and seeking clarifications from the authorities."

The issue is of great significance, as India's telecom equipment market is worth billions of dollars a year and is set to be boosted by the imminent award of 3G spectrum, which will herald a new wave of mobile network rollouts. (See India 3G Auction: Day 17.)

Both Huawei and ZTE, which have been planning further investments in their Indian operations to build on their existing sales of mobile, optical, and VoIP equipment in India, are keen to further their existing relationships with the country's operators and grab a slice of the 3G action. (See Huawei to Invest in India, Huawei Plays Managed Service Catchup, ZTE Boasts GSM Growth, ZTE Wins Unitech Deal, and ZTE Claims India Success.)

— Gagandeep Kaur, India Editor, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like