DoT lifts 8-month ban on import of telecom equipment

- Advertisement -

By Richa Chakravarty

The furore over imported telecom equipment requiring security clearance has finally cooled down as the Department of Telecommunications (DoT), Government of India, lifted the eight-month ban. Although a temporary halt, the telecom industry experienced a major jolt in the past eight months. However, telecom equipment manufacturers/importers have agreed to abide by the tough new rules laid down by the government.

- Advertisement -

New government norms

As per the latest norms for telecom companies sourcing equipment from foreign manufacturers, particularly Chinese companies, penalties of 100 per cent of the contract value will be imposed on mobile phone operators if any spyware is found in their imported equipment. International telecom equipment makers keen to do business in India will now have to deposit source codes and detailed designs of all products and services they sell in India, into an escrow account, in encrypted form. This can be accessed by security agencies and operators in case of an emergency.

Equipment orders pending

Since February 2010, the government had not cleared over 450 equipment orders worth close to US$ 3 billion, placed with Chinese vendors. As of March 2010, India had 621.3 million telecom subscribers, up 44.6 per cent from the previous year, and this is expected to reach 700 million by 2012. At this crucial time, when India is all set to roll out 3G/BWA services, any further delay in giving the security clearance would have thwarted this accelerated growth.

Abiding by the latest security rules, operators are left with no option but to sign an undertaking of Rs 500 million (with an indemnification letter) assuring the government to self certify their equipment. Signing of the indemnification letter will at least help the operators in importing core equipment for their expansion and launch programmes.

Loss of revenue

Imports in these eight months had dropped to zero. Looking at the statistics, the industry is estimated to have lost business of more than Rs 100 billion. However, some see this as a short term halt as it would reap benefits in the longer run. Opines Desi Valli, COO, Net 4, “Loss of revenue cannot be evaluated against the interests of national security.”

Allegations denied

Industry analysts feel that the government should not have targeted only the Chinese vendors. Negating all allegations of spyware found in Chinese equipment, Suresh Vaidyanathan, head, PR, Huawei, says, “We operate in 100 countries, including India. We have a proven track record and have 6000 Indian employees working in 11 locations in India. We cannot afford to do this. The government is just strengthening its monitoring mechanism.”

The lift on the ban comes as a big relief for many operators who have been banking on cheaper Chinese equipment to roll out 3G services. Moreover, operators who had pulled back on spending while waiting for the outcome of 3G auctions, have hope with this new mandate. “Even the government had to incur losses due to the loss in earnings from duties earned by importing these devices. The government completely understands the losses that the operators had to bear, but there is no escaping the fact that if this network comes down, it will be a national problem,’’ explains Rajan S Mathews, director general, Cellular Operators Association of India (COAI).

- Advertisement -

Most Popular Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!

Exclusive

Growth Opportunities Connected With The Growing Semicon EcoSystem In India

0
India must concentrate on electronics products and semiconductor components, as progress in one area reinforces the other. The country can unlock immense economic opportunities...

“Don’t Let Designations Become A Wild Goose Chase”

0
In his childhood, he possessed just one sweater, meant to last through many winters. He could not join IIT Roorkee because the cost of...

“Capitalise On ‘China Plus Two,’ Where Products With Higher Value Addition Become The Focus”

0
EPIC Foundation aims to transform India into an electronics hardware product nation by collaborating with governments, universities, design houses, and startups. In a conversation...

Buzz

Ultraviolette Aims For European And Middle Eastern Expansion

0
Niraj Rajmohan, Co-Founder and CTO of Ultraviolette stated that 2024 is set to mark the company’s foray into international markets while simultaneously strengthening its...

Chargeup’s Goal: 25,000 Drivers In 17 Cities By 2025, Prioritizing Smaller Cities

0
Chargeup, the forefront battery financing and comprehensive EV asset management platform in India, is on a mission to integrate 100,000 drivers within the upcoming...

Ampere Nexus, Electric Scooter Launching April 30th

0
Greaves Electric Mobility’s Nexus, having recently traversed the distance from Kashmir to Kanyakumari, is set to be the brand’s inaugural luxury electric scooter and...

Important Sectors

Exploring India’s Limited Selection: Just Six Robust Hybrids Priced Under ₹ 5 Million

0
As the United States passenger car market embraces hybrid vehicles, India’s car market is teeming with benefits and convenience for consumers. Yet, within the...

Top 10 Selling Electric Cars In The World

0
In the list of top 10 selling electric cars in the world, it seems to be a tight race between China’s BYD and the...

Ultraviolette Aims For European And Middle Eastern Expansion

0
Niraj Rajmohan, Co-Founder and CTO of Ultraviolette stated that 2024 is set to mark the company’s foray into international markets while simultaneously strengthening its...

Ampere Nexus, Electric Scooter Launching April 30th

0
Greaves Electric Mobility’s Nexus, having recently traversed the distance from Kashmir to Kanyakumari, is set to be the brand’s inaugural luxury electric scooter and...

Ford Investes In Expanding EV Software Capabilities At Chennai Hub

0
Ford Business Solutions India, presently with a staff of 12,000, is poised to expand by an additional 3,000 employees. Ford, recognized for its efforts...

Manufacturing

Honda plans major EV factory construction in Canada,

0
Honda's dedication to this facility reflects its wider ecological objectives, which include a target to only offer zero-emission vehicles by 2040 and to attain...
Sona Comstar

Sona Comstar Launches Mexico Plant For North American EV Demand

0
The new facility, established to address the increasing demand for premium driveline solutions for BEVs in North America, will focus on manufacturing differential assemblies...

Sterling Tools Inks MoU With Yongin For EV Components Facility

0
Sterling Tools announced that this strategic partnership is anticipated to bring in Rs 250 crore in business over the next five years. This collaboration...

Tata Elxsi-Renesas MCU Boosts EV Cost Efficiency And Market Speed

0
The Motor Control Unit's modular, scalable design facilitates integration across various EV applications, reducing time to market by 40%, lowering design and development costs...

Ramkrishna Forgings To Supply Powertrain Parts To Top US Electric Carmaker

0
Indian producer of rolled, forged, and machined products enter the US electric vehicle market for the first time. Ramkrishna Forgings, an Indian supplier of rolled,...