DoT Amends Telecom Equipment Procurement Rules, Tightens Noose Around ZTE, Huawei

As the country inches closer to the much awaited 5G auction, the Department of Telecommunications (DoT) has now amended the unified access services licence (UASL) agreement for procurement of telecom equipment.

As part of the amendment, the DoT has added the word ‘expansion’ to the fine print. It directed the telcos to seek permission before upgrading or expanding existing networks using products not designated as ‘trusted’.

“With effect from 15th June 2021, the licensee, shall only connect trusted products in its network, and also seek permission from designated authority for upgradation or expansion of existing network utilising the telecommunication equipment not designated as trusted products,” the DoT said.

The amendment is expected to plug a loophole that telcos used to onboard Chinese original equipment manufacturers (OEMs) such as Huawei and ZTE as gear partners. The amendment was introduced after many companies were reportedly awarding contracts to the two Chinese players under the guise of ‘expansion of network’.

Earlier, the Centre had mandated the ‘trusted source’ tag for telecom vendors. Beginning November last year, many European companies such as Nokia and Ericsson, American firms such as Cisco, Dell and HP as well as Tata-owned Tejas Networks received the approval. On the other hand, Chinese majors Huawei and ZTE were reportedly yet to complete paperwork for the tag of ‘trusted source’. 

The amendment will likely tighten the noose around Chinese companies, ruling them out of the race to provide next-generation 5G telecom networks to Indian telcos. The government has  apprehensions regarding Chinese players handling bulk of India’s wireless networks. 

While services from firms such as ZTE and Huawei are cheap and easy to procure, concerns continue over a 2014 incident when Huawei had allegedly hacked state-owned BSNL’s network.

This also comes at a time when Chinese mobile companies such as Xiaomi, Oppo and Vivo are being probed for alleged tax evasion and FEMA violations in the country. This adds to the long-drawn battle between Indian authorities and Chinese tech companies since the border faceoff between New Delhi and Beijing in Eastern Ladakh, which resulted in clashes and death of 20 Indian soldiers in 2020. 

India has also banned more than 320 mobile apps in the last two years which originated in China or had some Chinese connection on grounds of national security. 

The latest DoT move comes as the country prepares for the upcoming 5G auctions, scheduled at the end of this month. It will see the government putting up more than 72 GHz of spectrum for auction.