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India: Government Shuts Out Top Global Network Vendors from Rs 21,000 Crore Fibre Optic Venture
Source: economictimes.indiatimes.com
Source Date: Saturday, January 19, 2013
Focus: Knowledge Management in Government
Country: India
Created: Jan 21, 2013

KOLKATA: Leading global telecom equipment vendors have been barred by the government from supplying gear for the communications ministry's Rs 21,000-crore broadband venture involving the rollout of a national fibre optic network (NOFN) that will take high-speed internet to the hinterlands, top executives aware of the development said.

Ericsson, Nokia Siemens Networks, Alcatel-Lucent, Huawei and ZTE are missing from the telecom department (DoT) certified list of vendors eligible to supply Gigabit Passive Optical Network, or GPON, which is the chosen fibre technology for this project.

DoT has said that 100 per cent domestic sourcing is mandatory for the project by 2014-15, and its list of certified vendors includes — Himachal Futuristic Communications (HFCL), ITI, Tejas Networks, C-DoT, VMC Systems, Prithvi Infosystems, Sai Systems, United Telecoms and SM Creative. The project is overseen by a new entity called Bharat Broadband Network (BBNL) and is being executed by BSNL and MTNL.

"We will comply with DoT's network security guidelines and norms to promote domestic manufacturing of network gear and will invite bids by mid-February," a top BBNL executive told ET. The latest developments come barely three months after research body C-DoT had urged the telecom department to keep Chinese vendors Huawei and ZTE out of "sensitive government projects on security grounds", citing a recent US Congressional report that had claimed both companies were a threat owing to their alleged links with the Chinese military.

The government appears to have gone a step further by excluding all foreign vendors. C-DoT already has GPON technology transfer pacts with six of the certified vendors — ITI, Tejas Networks, VMC, Sai Systems, United Telecoms and SM Creative. The Indian units of Ericsson, Nokia Siemens Networks, Huawei, ZTE and Alcatel Lucent declined to reply to ET's specific queries on whether they were upset over their exclusion from the list of eligible GPON suppliers, but people close to these companies did not mince words.

"It is difficult to understand how the suggested levels of domestic sourcing for GPON equipment have been defined when they are yet to be launched or reach a certain level in terms of economies of scale in India," said a top executive with a leading international telecom gearmaker, adding that the deliverables are improbable to comply in the absence of a ready eco system.

Another executive, who also declined to be named claimed that "the government may end up paying a higher amount for GPON gear as there was a 22 per cent cost disadvantage for electronics manufactured in India compared to imports".
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