Government tells BSNL to rework tender to keep Chinese out

NEW DELHI: In what appears to be a case of retaliation against PLA's attack on the Army, the department of telecommunications (DoT) has decided to convey to Bharat Sanchar Nigam Ltd (BSNL) that no Chinese equipment should be used by the state-run company, which is expanding into the 4G business as part of its rehabilitation plan.
The public sector company is being asked to rework its tender immediately, sources told TOI. In addition, the government is looking to impress upon private sector mobile operators to increasingly reduce their dependence on Chinese equipment.
Political and business circles saw the twin moves as a precursor to keeping Chinese vendors -- led by Huawei -- out of the 5G equipment business in the country, where bids have currently been postponed.
While official sources refused to confirm whether the retaliation in the economic sphere might be further escalated, they said that the attack on the Indian Army in Ladakh is sure to strengthen the misgivings in the government about letting the Chinese companies in strategic sectors because of fears that PLA has a decisive stake in some of these companies.
Huawei has for long been suspected to be an enterprise of the PLA and has not been able to shake off the worry about it being an arm of the powerful Chinese army.
For foreign players, including Chinese entities, the Indian telecom sector is seen to be very lucrative given the large base, which can be matched only across the border.
Concerns over BSNL’s Rs 9,000-crore 4G tender had been raised a couple of months ago with the department for promotion of industry and internal trade asking the public sector player to rework the terms as it was seen to be favouring foreign players and violating the domestic procurement norms. The DoT has now added a China-specific dimension to the issue.
The review of the telecom equipment vendors comes along with checks on investments with the government banning all foreign direct investments from China via the automatic route, a decision that was triggered by sensitivities around security.
Last year, the National Security Council Secretariat had initiated a discussion around restricting access to companies and contractors from certain countries in strategic sectors and in certain parts of the country. The proposal was on the backburner for a few months but may be revived given the recent tensions.