Govt bans import of Chinese telecom equipment

By Thomas K. Thomas
New Delhi
April 28, 2010

The Government has officially told mobile operators not to import any equipment manufactured by Chinese vendors, including Huawei and ZTE.

Though the Department of Telecom had been informally telling the operators to keep away from Chinese telecom equipment, this is the first time that it has sent an order banning Chinese gear.

The order was sent out by the DoT on Tuesday to some of the operators that were planning to buy equipment from Chinese manufacturers. The ban order follows concerns raised by the Home Ministry that telecom equipment from some countries could have spyware or malware that gives intelligence agencies across the border access to telecom networks in India.

The Government had earlier banned import of Chinese handsets without IMEI number. The DoT move is a huge blow to ZTE and Huawei that are betting big on the Indian market. ZTE had a record-breaking performance in the last fiscal in India by registering a 50 per cent increase in sales compared with the previous year. The ban also puts the new mobile operators in a quandary as most were banking on attractive financing schemes by Chinese vendors to purchase network equipment.

The biggest gainers from the move could be European and American vendors that have been losing market share to aggressive Chinese equipment-makers.