India allows telecom imports after 8-month ban

Aug 25, 2010 By ERIKA KINETZ , AP Business Writer

(AP) -- India has relaxed an eight-month ban on imports of telecommunication equipment, approving orders from China's ZTE and Huawei and Finland's Nokia Siemens Networks, executives said Wednesday, as security fears fade before an urgent need to roll out third-generation wireless infrastructure.

ZTE agreed to tough new security regulations, including handing over proprietary information - called source code - used to run networks, regular inspections and large penalties for security breaches, two executives said on condition of anonymity because of the sensitivity of the ongoing discussions.

It was not clear Wednesday whether Huawei and , which won a contract this week to build out Tata Teleservices' , also agreed to the regulations.

U.S. trade groups have worried that Chinese companies are more willing to part with their source code than their U.S. and European competitors, which could effectively squeeze out Western companies - already battling China's rising telecom giants on price - from India's booming market.

Talks between Indian government and corporate officials over the security rules are ongoing.

India's Department of Telecommunications in July laid down strict security regulations on imports, prompting an outcry from equipment makers and trade groups, who feared they would set a harsh global precedent and scuttle billions of dollars worth of contracts for companies like Ericsson and Cisco.

Under the rules - which were believed to have been prompted by fears that Chinese companies would use their networks for spying - foreign equipment makers must allow regular security inspections, hire Indian engineers and make their network design and source code available to the Indian government.

In the event of a , operators would face a penalty of 500 million rupees ($10.8 million) plus 100 percent of the value of the contract - which often totals several hundred million dollars - while equipment vendors could be blacklisted.

U.S., European and Japanese trade groups urged political intervention, and widespread Indian media reports said the Prime Minister's Office asked the Department of Telecommunications to soften the security provisions.

The Department of Telecommunications did not reply to requests for comment Wednesday.

"The matter is juggling between the Prime Minister's Office and the Department of Telecommunications," said an official at a foreign equipment maker who spoke on condition of anonymity because of the sensitivity of the talks.

As of March, India had 621.3 million telecom subscribers, up 44.6 percent from the prior year. Additional 3G bandwidth is badly needed to unclog overburdened networks and introduce high speed data services.

India's relations with China have been beset by mutual suspicion and competitiveness.

China has been gaining strength in India's telecom market, with telecom equipment accounting for an estimated 14 percent of India's $21.4 billion trade deficit with China last fiscal year.

That imbalance is a concern in New Delhi, which last year imposed antidumping duties on companies including ZTE and Huawei.

The two nations went to war in 1962 and still tussle over their border.

Explore further: Net expansion driven by mobile presents risks and opportunities for marketers

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Tough Indian telecom rules spark foreign backlash

Aug 03, 2010

(AP) -- Telecom companies and trade groups are urging India to soften tough new security regulations on foreign telecommunications companies - believed to be aimed at China - which they say could set a troubling global precedent ...

India restricting Chinese telecom purchases: operator

Apr 30, 2010

India has blocked its fast-growing telecom sector from buying some Chinese-made equipment, an Indian mobile operator said Friday, in a move set to stoke trade tensions between the emerging giants.

India says will start 3G auction in January

Oct 25, 2009

India said Saturday a long-delayed auction of radio bandwidth for third generation (3G) telecommunications services will start in January and will be open to foreign companies.

India gets tough with Blackberry, Skype: report

Jul 01, 2010

India has given Internet telephony pioneer Skype and the makers of BlackBerry handsets a deadline to fall into line with strict security-monitoring regulations or be blocked, a report said Thursday.

Recommended for you

Google wireless service could disrupt carriers

Jan 27, 2015

Internet users from San Jose to Kansas City have been clamoring for Google to lay down its long-awaited fiber-optic network to compete with Comcast and AT&T in speeding up Web and television access. Now the Silicon Valley ...

Google super-fast US Internet service spreads

Jan 27, 2015

Google's super-fast Internet service—up to 100 times quicker than basic broadband—is heading for four more US metropolitan areas as the technology titan ramps up pressure on cable service giants.

Transmitting wireless data on higher frequencies

Jan 27, 2015

Everything we do that requires a wireless connection uses the radio spectrum. We're able to harness radio waves to listen to music in the car or stream Netflix from the 4G network on our smartphones. Each ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

vishygor
not rated yet Aug 30, 2010
this isa a chinese trick , these guys at ttsl & reliance are onlt after money, understand we wre playing in chinese hands, tomorrow there is an war and u need support for your infra, u will get no help from chinese, and why should they for we being fools
WAKE UP TTSL & RELIANCE atleast for INDIA's

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.