BSNL can buy equipment from Chinese vendors

After a temporary bar due to security concerns, the government has lifted ban on state-run telecom firm BSNL to procure equipment from Chinese vendors, Parliament was informed on Thursday.

"In the interest of national security, the government had directed BSNL in May, 2009 that resources should not be procured from the Chinese vendors for deployment in the sensitive regions (especially border states)," Minister of State for Telecom and IT Sachin Pilot said in a written reply to the Rajya Sabha.

New guidelines have been issued for procuring telecom equipment from foreign vendors in consultation with the Ministry of Home Affairs to address security concerns, Pilot said, adding "accordingly, now BSNL may enter into agreement with foreign vendors for purchase of equipments/software/services."

In its last tender for about five million GSM lines, the PSU had invited bids only from three European and American vendors and Chinese companies were totally left out. BSNL employee unions raised the issue with the Department of Telecom (DoT) last week.

They alleged that ban on BSNL for buying equipment from Chinese vendors was "discriminatory", as private players were allowed the imports from China. Elaborating on the reasons for "discrimination" against BSNL, Pilot said that participation of foreign companies in strategic sector has bearing on national security.

"BSNL being a public sector undertaking, it network has to be relied upon in emergency," he added. Earlier, DoT had barred BSNL from deploying Chinese equipment in sensitive regions -- Assam, Manipur, Tripura, Sikkim, Nagaland, Arunachal Pradesh, Mizoram, Meghalaya, West Bengal, Gujarat, Rajasthan, Punjab, Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Maharashtra.

Now, with the new guidelines and template of agreement between telecom service providers and equipment vendors in place, BSNL would be able to place the orders with any foreign firm including from China.

Questioning the rationale behind the move, Sanchar Nigam Employees Association had said, "This is absolutely ridiculous for the simple reason that the move is just intended to jeopardise the growth of BSNL. "How are the security interests of the country protected while allowing private operators to install Chinese GSM equipment and restraining BSNL from doing so?"

BSNL plans to expand network capacity manifold in the coming months in view of growing demand for mobile telephony, especially in the rural areas. Allowing BSNL to buy equipment freely from foreign vendors will help the state-owned firm in taking commercially viable decisions.