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Huawei Seeks Talks Over Indian Lockdown

A delegation of senior officials from Huawei Technologies Co. Ltd. is set to visit India for meetings with government officials concerning the current restrictions being placed on the purchase of Chinese technology.

The company is concerned that carriers are being prevented by India's Department of Telecommunications , because of security concerns, from placing such orders. (See India Watch: Vendor Lockdown.)

"We are actively cooperating with the Government in addressing the security issue, and we hope to address the issue at the earliest [possible time]," says a Huawei spokesperson, who confirmed the delegation's plans.

While the DoT has denied there is a blanket ban on the purchase of network equipment from the likes of Huawei and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), it seems the Department, under new rules that require all planned purchases to be cleared by the DoT, has been blocking purchase orders. (See India's DoT Denies Blanket Ban on Chinese Gear.)

Reports suggest that 11 applications made during the past two months by carriers such as Aircel Ltd. , Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Idea Cellular Ltd. , Loop Mobile , Tata Teleservices Ltd. , Uninor , and Vodafone India have been rejected, but Light Reading Asia sources say they have instead been put on hold.

And with India's 3G spectrum auction drawing to a close, the winners will soon be looking to plan their 3G rollouts and procure the appropriate network equipment, a wave of new business the likes of Huawei and ZTE will be keen not to miss out on. (See India 3G Auction: Day 17.)

At least one industry analyst believes the current situation could hit the Chinese vendors hard, and open up greater opportunities for Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Nokia Networks .

"There are conflicting reports emerging from the Government, but it is clear that the expansion plans of the Chinese vendors like Huawei and ZTE are likely to take a huge hit," Santosh Sinha, ICT Practice analyst at Frost & Sullivan told Light Reading Asia. "Even if the issue is sorted out soon, it is going to be a deterrent to the new operators, and the European vendors will go full throttle to capture as much market share as possible," adds Sinha, who believes the Chinese vendors may need to provide the DoT with a detailed explanation of how their technologies work.

India is one of the few booming markets for telecom equipment, and the Chinese vendors are keen to capture a significant part of the available business. At a recent press conference, ZTE India's managing director, Dr. D.K. Ghosh, said he was hoping to win up to 15 percent of the 3G and WiMax equipment market in India this year. Huawei, meanwhile, has been extending its business in India significantly of late, recording a 100 percent increase in revenues in the country in 2009.

The Cellular Operators Association of India (COAI) says it is likely to issue a letter to the government Wednesday to take up the cause of the operators affected by the DoT's decisions, though the association is not providing any details yet about what line it will take on behalf of the carriers.

— Gagandeep Kaur, India Editor, Light Reading

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