Citing national security concerns, the Department of Telecommunications (DoT) has strictly directed private players not to use Chinese equipments in 20 out of the 29 states, in a move to ward off Chinese equipment manufacturers from Indian market.
DoT, after a meeting with private operators, has directed the private players to avoid using Chinese equipments. However, the companies are arguing that the move will increase the price of equipment as the Chinese are cost effective and completely avoiding them would lead to a monopoly of European vendors.
New entrants in GSM mobile telephony, including Reliance Communications, Unitech Wireless, Aircel and Datacom are using Chinese equipment. There are apprehensions of European vendors that have tied up long-term contracts with Airtel and Vodafone, making a monopolist clout in the market. The cost effective supply of equipments by Chinese have made them favorite as two Chinese vendors, Huawei Technologies and ZTE, have appropriated nearly 20% of the $7-8 billion-a-year market.
Huawei Technologies and ZTE are clearly disappointed by DoT’s move and contend that their business has nothing to do with security concerns. They have also said if they are separated from Indian business, project costs of operators will go up by 40-50%.