BSNL bans Huawei, ZTE from 55 Lakh GSM contract

By siliconindia   |    16 Comments
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BSNL bans Huawei, ZTE from 55 Lakh GSM contract
New Delhi: BSNL has barred Chinese vendors Huawei and ZTE from bidding for its 2,000-crore contract for supply 55 lakh GSM lines for its northern and eastern regions. The company has specified that only three Western vendors-Ericsssaon, Nokia Siemens and Alcatel Lucent-can participate in the bidding process.

"It is a fact that telecom gear from Western vendors are expensive when compared to Chinese, but a government directive prevents us from placing any orders with telecom gear makers from China , especially if the equipment has to be installed in circles that share international boundaries," BSNL Chairman & Managing Director Kuldeep Goyal told Economic Times. He added that BSNL board had cleared the new tender, limiting the participation to the three Western vendors, last week.

This is the first tender the PSU has floated after it cancelled its 93 million lines contract, the world's largest for telecom equipment, earlier this year. Following the junking of the 93 million lines contract, which had run into several controversies, including court cases and a probe by the Central Vigilance Commission, BSNL had decided to away with its tender-based equipment procurement process and adopt the 'managed capacity model' followed by private telcos.

The Communications Ministry, in a letter dated May 10 to BSNL, has told the PSU that its plans to outsource the building, management, maintenance of its networks to global equipment majors may pose a 'threat to national security'.

The letter added that since the government relied on BSNL's networks during times of external aggression and internal disturbances, the telco should not compromise on the security factor. The telecom department has also told BSNL that it can only approve a new procurement model after studying the security angle.

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