Telcos told to stop sourcing 4G telecom equipment from Chinese firms

The Department of Telecommunications is learnt to have directed state-owned Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) to exclude Chinese gearmakers from supplying 4G telecom equipment. Private telecom operators have been asked to consider staying away from such Chinese firms.

The decision was taken during a meeting of the telecom department, late on Wednesday evening, sources said. It is learnt that BSNL and MTNL representatives were not part of the meeting, but have been informed about the decision. When contacted, the private operators said they were unaware of any such decision by the DoT.

Last month, BSNL staff had written to Prime Minister Narendra Modi to stop domestic telecom gearmakers from scuttling the company’s revival plan by putting a spanner in the tender for sourcing 4G equipment. In the letter, they had alleged that the issue raised by the industry body, Telecom Equipment and Services Export Promotion Council (TEPC), was a ploy to stall the 4G equipment procurement and the launch of 4G services by BSNL.

The major private operators — Reliance Jio, Bharti Airtel, and Vodafone Idea — are procuring their 4G equipment from multinational companies, such as Nokia, Ericsson, ZTE, Huawei, and Samsung.

BSNL would be the last company to join the 4G bandwagon as the company prepares to compete with the private telecom companies.

The exclusion of Chinese telecom equipment suppliers may delay the 4G journey for BSNL. 

Private telcos, such as Bharti Airtel and Vodafone Idea, will also be under pressure to not buy from Chinese vendors, even as contracts for their equipment may be cheaper compared to European manufacturers.  Ahead of the 5G auction, such a development may come as a challenge for the financially stressed telecom industry. 

In fact, Bharti chairman Sunil Mittal had batted for a Chinese manufacturer at a conference last year. He had said Huawei products were superior to those made by European companies.