Mobile operators rush to rework equipment sourcing pacts

While the government has not barred procurement of equipment from Chinese companies, the process to amend the general financial rules (GFR) 2017 has started.

This will impose restrictions on bidders in public procurement from countries that share a land border with India, reports Megha Manchanda.

With the government coming up with new licensing norms soon, mandating companies to procure telecom gear from trusted sources, mobile operators have started reworking their equipment sourcing pacts.

Amendments to the telecom licensing norms are expected any time, mainly to incorporate guidelines of the national security directive (NSD) on the telecommunications sector. They may also seek to control installation of network equipment, mainly from China.

Experts said that telecom companies are investing in augmenting networks, including all the bandwidths -- 2G, 3G and 4G.

The operators are also de-risking themselves from Chinese equipment firms by not renewing existing pacts with gear makers.

Bharti Airtel has already replaced Chinese equipment maker Huawei, in the Rajasthan and Tamil Nadu circles, with Ericsson.

It is learnt that the company may even explore banning Chinese gear from its other circles.

The country's largest telecom operator Reliance Jio's binding agreement with South Korean equipment maker Samsung will end soon.

According to the current agreement, Samsung can only supply gear to Jio, while Jio has no such compulsion.

Once the tenure of the agreement is over, even Samsung would be able to pursue pacts with other telecom companies.

The government will soon declare a list of trusted sources and trusted products for installation in the country's telecom network.

The department of telecommunications (DoT) is ready to amend licensing conditions to incorporate guidelines of the NSD. This should be done in the coming week.

The US had alleged that Chinese vendors did not comply with its cybersecurity and privacy laws, leaving the country and its citizens vulnerable to espionage.

The list of trusted sources and products for installation in telecom networks will be decided after approval by a committee headed by the deputy national security advisor.

The committee will consist of mem­bers from relevant departments, ministries and also have two members from the industry and independent experts.

The directive, issued by DoT, does not envisage mandatory replacement of equipment already inducted in the network of telecom operators.

It will also not affect annual maintenance contracts or updates to existing equipment already inducted in the network.

While the government has not barred procurement of equipment from Chinese companies, the process to amend the general financial rules (GFR) 2017 has started.

This will impose restrictions on bidders in public procurement from countries that share a land border with India.

This will be on grounds of defence of India, or matters directly or indirectly related to national security.

Feature Presentation: Rajesh Alva/Rediff.com.