NEW DELHI: The Indian government will bar Chinese companies from providing any telecom equipment to state-run telcos and may also prohibit private mobile phone operators from using gear supplied by the likes of Huawei and ZTE going forward, a senior official said, marking India’s first major economic reaction to the skirmishes on the border with Chinese troops. The telecom department will soon also cancel a 4G telecom equipment tender floated by state-run Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) and rework it to keep out Chinese vendors, the official said. “The government has taken a decision to cancel the tender which was floated (by BSNL) earlier this year,” the senior government official told ET. “We will likely also not allow private operators to use Chinese gear in the future and will encourage domestic telecom equipment makers”. Once signed off, the order will deal a body blow to the Indian operations of Huawei and ZTE who will thus be barred from the country’s commercial 5G deployments. Currently, industry estimates peg the annual market for Indian telecom equipment to be around Rs12,000 crore, of which Chinese players account for roughly a fourth. The rest of the market comprises mainly of Sweden’s Ericsson, Finland’s Nokia and Korea’s Samsung. Bharti Airtel and Vodafone Idea work with both Huawei and ZTE, besides the European vendors, while Reliance Jio works with Samsung. The decision, which was taken at the highest levels of the government on Wednesday, comes within hours of the Prime Minister saying that India would retaliate if it were instigated by China. “We have constantly received complaints from our telecom manufacturers that China is not permitting import of Indian telecom equipment where as it is subsidizing Chinese telecom gear which is then underpriced in the Indian market,” the official said. “As a result, our indigenous telecom equipment manufacturers are unable to come-up". He added that telecom formed the backbone of critical digital infrastructure and the government is taking decisions to safeguard the country’s security. “The government will also hold a multiple stakeholder discussion with private telecom companies on how to promote indigenous telecom equipment manufacturing in the country.” India’s private telcos though had been batting for Huawei and ZTE to remain in the fray, as they offered cheaper equipment and also attractive vendor financing options. Analysts say barring the two could lead to a 10-15% rise in gear procurement costs as non-Chinese suppliers could levy a premium. There could be supply chain issues with fewer vendors to choose from, especially with Europe/US battling Covid19. The decision on Huawei and ZTE though is just what the US had been hoping for amidst its own trade war with China. Washington has been pressuring allies and friendly countries, including India, to bar Huawei, flagging security concerns and citing the company’s alleged proximity to the Chinese government. China on its part has warned India of economic consequences if Huawei was excluded from 5G. Countries such as Australia, New Zealand, Japan and Taiwan besides the US are keeping Huawei out of 5G deployment, while others such as the UK, France, the Netherlands, Russia and South Korea have allowed the Chinese equipment maker to participate. The UK though is reviewing the impact of the limited role that it had allowed Huawei. While cancelling the tender floated by the state-run telcos, which had been placed earlier in March, a government committee headed by the telecom department will finalise, in the new tender, the specification of the core and the RAN of the 4G telecom infrastructure to ensure that it has significant domestic content and indigenous technology. “Large Indian companies have evinced interest in providing 4G gear to the state-run telcos,” the official said.

New Delhi: The Telecom department has decided to rule out the use of Chinese equipment in the up-gradation of the 4G equipment of the state-owned Bharat Sanchar Nigam Limited or BSNL.
The Indian government will bar Chinese companies from providing any telecom equipment to state-run telcos and may also prohibit private mobile phone operators from using gear supplied by the likes of Huawei and ZTE going forward, a senior official said.

Sources in the government said the ministry has decided to “firmly tell BSNL” not to use Chinese equipment in view if security issues. Sources said the department has also decided to rework the tender in this regard.

Telecom companies like Bharti Airtel and Vodafone Idea have been working with Huawei in their current networks, while ZTE works with state-run BSNL.Upgradation of 4G facilities is part of the BSNL’s revival package and earlier this year, there was a tug of war between  BSNL employees and the government over the latter’s insistence on the use of homegrown firms to boost its Make in India policy. The BSNL employees had pointed out that all its competitors — Bharati Airtel, Vodafone and Reliance Jio — were using equipment from multinationals.
Currently, business estimates peg the annual marketplace for Indian telecom gear to be round Rs12,000 crore, of which Chinese gamers account for roughly a fourth. The remainder of the market includes primarily of Sweden’s Ericsson, Finland’s Nokia and Korea’s Samsung. Bharti Airtel and Vodafone Idea work with each Huawei and ZTE, moreover the European distributors, whereas Reliance Jio works with Samsung.
The determination, which was taken on the highest ranges of the federal government on Wednesday, comes inside hours of the Prime Minister saying that India would retaliate if it have been instigated by China.