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China firms eye BSNL order

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  • Published 3.09.10

New Delhi, Sept. 2: Chinese telecom vendors are confident of giving a “strong fight” to European firms for BSNL’s Rs 2,000-crore equipment order.

The PSU company has recently come out with a fresh proposal inviting China’s ZTE and Huawei to bid for the contract involving 5.5 million GSM lines. Alcatel-Lucent (France-US), Ericsson (Sweden) and Nokia Siemens (Finland-Germany) are the other bidders.

Earlier, Chinese firms were not allowed to participate over security concerns.

“We will definitely bid for BSNL’s tender and will give a strong fight to European vendors,” D.K. Ghosh, chairman and managing director of ZTE, told The Telegraph.

According to Ghosh, ZTE was eager to win the project though European vendors have been able to match the Chinese gear makers on all fronts, including price.

Industry participants, however, said Chinese equipment was still 30 per cent cheaper.

Huawei and ZTE have not won any BSNL contract in the past few years.

In March, BSNL cancelled a 93-million-line tender worth Rs 35,000 crore amid charges that the bidding lacked competition and the capacity addition was too high for the PSU to handle.

Huawei had bagged the contract for south India to providing 23 million lines. The three-year deal was estimated to be worth around $750 million (over Rs 3,400 crore).

The cancellation of the order has delayed the telecom PSU’s expansion plans.

The company has been losing ground to private entities. BSNL’s share of the market, which was once above 20 per cent, has fallen to 12 per cent.

Ghosh said Chinese companies were not allowed to provide a certificate testifying that their equipment was free of spyware.

“We have to sign an agreement with the mobile service provider, whereby the vendor agrees to share software source code and design details with security agencies,” said Ghosh.

At present, rules permit foreign vendors to either certify the authenticity of their software or hand over their codes to security agencies.

Ghosh said ZTE was not against the code sharing policy but expected the government to provide a “transparent policy for all vendors without any differential treatment”.

Equipment makers would be meeting the home ministry next week to discuss the details of the import policy.

The department of telecom will take a final decision on the rules for importing telecom gear from European and Chinese firms by November.