Chinese firms back in BSNL tender fray as EU, US firms withdraw

Chinese telecom majors Huawei and ZTE, which until a few months ago were not allowed to supply GSM equipment to BSNL due to security concerns raised by the government, may be the only bidders fighting for the new tender for installing a GSM network of 5.5 million telephone lines in Northern and Eastern zones.

The irony is razor sharp. Chinese telecom majors Huawei and ZTE, which until a few months ago were not allowed to supply GSM equipment to Bharat Sanchar Nigam Ltd (BSNL) due to security concerns raised by the government, may be the only bidders fighting for the new tender for installing a GSM network of 5.5 million telephone lines in Northern and Eastern zones.

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This is due to the new Home Ministry security guidelines that make it mandatory for all vendors to share their source code — a software that runs the telecom equipment — with the government.

European giant Ericsson, which accounts for about 50 per cent of BSNL’s existing network, has already withdrawn from the tender citing its inability to meet the new security guidelines.

“This tender requires the vendor to mandatory deposit the hardware and software code in an Escrow account,” said P. Balaji, vice president (business development), Ericsson India Pvt. Ltd.

Officials of all European and US companies, including Nokia Siemens Network (NSN) and Alcatel Lucent had recently told the Home Ministry that they could not meet the new security guidelines.

“We have shared our opinion with the relevant authorities that the proposed escrow clause is not feasible to implement,” said the official spokesperson of NSN.

Alcatel Lucent did not respond to emailed queries.

The Chinese companies are on the offensive. “We would like to be in total compliance of the security requirements of our government,” ZTE Telecom CMD D.K. Ghosh told HT. “We are confident of meeting the requirements.”

Earlier, intelligence agencies had asked the government to ban telecom operators from using Chinese equipment in their networks due to security concerns.