BSNL chairman Kuldeep Goyal in New Delhi on Friday. Picture by Prem Singh

New Delhi, Nov. 6: State-run Bharat Sanchar Nigam Ltd (BSNL) has awarded part of its expansion contract in GSM-based mobile services to Huawei, despite security concerns over the use of Chinese equipment.

“We have placed an order for 8 million lines with Huawei for the south zone. There are no security hazards as this zone is not considered sensitive,” said Kuldeep Goyal, chairman of BSNL.

The department of telecom has ordered that all Huawei’s network equipment be tested before they are put to use.

Earlier, the government had decided not to allow Chinese companies to supply equipment in areas adjacent to Pakistan, Nepal, Bangladesh or Myanmar.

Huawei was the highest bidder for the west and the second-highest for the north and the east. However, it was not given the contracts in the three zones on security grounds.

BSNL has also shortlisted Sweden’s Ericsson for laying 93 million GSM lines.

The expansion plan, worth around Rs 30,000 crore, is the largest telecom contract in the world.

Ericsson emerged as the lowest bidder in the north and the east. “Price negotiations are on with Ericsson for these two zones. We hope to finalise the deal within a week or two,” said Goyal.

On BSNL’s listing plans, Goyal said the company would pursue an initial public offering once it got a go ahead from the government.