Chinese telecom vendors may be barred from defence network bids

Chinese telecom vendors may be barred from defence network bids
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First Published: Fri, Dec 04 2009. 12 28 AM IST

Graphics: Yogesh Kumar / Mint
Graphics: Yogesh Kumar / Mint
Updated: Fri, Dec 04 2009. 12 28 AM IST
New Delhi: Security concerns over allowing companies from a country whose relationship with India continues to be fraught with tension may see Chinese telecom equipment vendors not being allowed to bid for a tender to build an alternative optical fibre cable, or OFC, network for the defence forces in India, at a cost of around Rs10,000 crore.
In June, the department of telecommunications, or DoT, and the ministry of defence signed a memorandum of understanding (MoU) that would enable the defence forces to vacate more than 45 MHz of spectrum, including 25 MHz of spectrum needed to provide 3G services over the next three years.
Graphics: Yogesh Kumar / Mint
Spectrum refers to the airwaves on which mobile communications are carried out. The defence forces are at present the biggest single users of spectrum, sitting on around 40% of spectrum needed for other services, DoT officials said.
The defence forces would move some of their communication requirements to this alternative OFC as and when the state run telcos, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), have completed building the alternative network.
The government has already issued directives to the state-run telecom firms not to hire Chinese firms for projects in the border areas in the northern, eastern and western parts of the country. BSNL is expected to award the contract for rolling out the south portion of its 93 million line phase six contract soon.
For the OFC network, “the defence ministry is against any Chinese firms taking part in this bid as they have security concerns”, a senior telecom ministry official said on the condition of anonymity as he is not authorized to speak to the media. “Whether their concerns may be valid or not is irrelevant for the most part as it is in their purview to look into the security aspects of the OFC.”
“Another cause for concern (about using Chinese vendors) is that the OFC network will also act as the secure backbone of communication in the face of disaster,” said another senior DoT official who spoke on condition of anonymity.
India’s home ministry has decided to connect around 5,000 key government offices across the country using this OFC network in order to ensure that the government is not cut off from affected areas in case of a tsunami, or other cataclysmic events.
BSNL is expected to issue the tender for the roll-out of the defence OFC network later this week after the cabinet clears the proposal.
BSNL and MTNL have already been building an OFC for the Indian Air Force at an estimated cost of Rs1,077 crore, which will be reimbursed by DoT. The air force will then vacate around around 42.5 MHz of spectrum. The OFC network for the army and navy will be built over the next 37 months by BSNL, according to a timeline prescribed in the June MoU, which entails the finalization of tenders for equipment vendors within seven months of signing of the MoU.
The OFC network for the army and navy is expected to cost Rs8,893 crore. The proposals for the amount to be paid to BSNL by DoT for building an OFC have to be approved by the cabinet committee on economic affairs.
State-run telcos will lay a total of 40,000km of optical fibre to connect 219 army stations, 33 navy stations and 162 air force stations across the country as part of OFC.
Executives from the two major Chinese telecom equipment firms in India, ZTE and Huawei declined to comment on the issue claiming that they had not been officially intimated about the decision to keep out Chinese firms from the bids.
shauvik.g@livemint.com
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First Published: Fri, Dec 04 2009. 12 28 AM IST