Security Concerns Cause Problems for Huawei Indian GSM Tender

India's state-owned BSNL has reportedly dropped China's Huawei from a short list of suppliers in the regions closest to Pakistan, possibly because intelligence officials were unhappy with the vendor's entry in the sensitive area.

BSNL apparently dropped the Chinese vendor after the Intelligence Bureau wrote to it, saying Huawei cannot be entrusted with the telecom expansion on the sensitive western zone.

Although Huawei has repeatedly denied it, the company has often been subject to rumours about its alleged close links to the Chinese government and military.

"Huawei is being considered only for south zone ... It is not being considered for the west zone ... at the moment we do not need any immediate expansion for the west zone as the region has capacity of nine million GSM lines provided by ITI-Alcatel from the previous tender," Goyal told the Press Trust of India.

Ericsson was the lowest bidder in North and East zones while Huawei was the lowest bidder in South and West, and there were sole bidders in their respective zones.

While BSNL's contract is for 93 million GSM lines, no one bidder will be able to win more than 50 million lines - and will be committed to offering replacement parts and maintenance for at least seven years. The tender document splits the allocation into four sections - three of 25 million lines for the North, West and South - with 18 million lines for the East. Of the total, some 21 million lines must be provisioned for 3G services as well as GSM.

The various contracts are estimated to be collectively worth around US$6.5 billion.

On the web: The Economic Times

Posted to the site on 21st May 2009