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Chinese telecom suppliers blacklisted in India

07-09-2010 15:55 BJT

By Wang Lei, People's Daily Online correspondent in India

According to Indian media reports, the Indian government has blacklisted 26 telecommunications equipment providers including 25 Chinese enterprises such as Huawei and Zhongxing Telecommunications Equipment (ZTE).

India's media outlets previously hyped the setbacks that China had encountered in importing telecom equipment to India, and an Indian minister almost lost his position just because he once persuaded the Indian government to relax restrictions on China-made telecom equipment.

A ban in disguise

Insiders pointed out that the Indian government "proposed an exclusion of telecom equipment from the 26 foreign companies" despite the fact that it has not imposed a ban on China-made products by issuing an administrative document.

Indian-based The Economic Times recently reported that this blacklist was made by the Indian government and a total of 450 order contracts reached between India's telecom operators and the 26 companies failed to gain approval from the Indian government. However, it is said that relevant contracts signed between India's telecom operators and their Western partners such as Ericsson and Nokia have been approved.

According to Indian media reports, India has said that there is not a ban on equipment from any specific country, but the blacklist has contradicted this claim. The Indian government has denied the existence of such a blacklist, stressing that India has not discriminated against relevant products from specific countries. The Indian government added that it has ruled that telecom products manufactured by relevant companies are subject to regulatory approval before being imported to India because India cares for its own safety.

Well-informed source disclosed that the Indian government once urged India's telecom operators to make changes to their procurement plans and stop purchasing products manufactured by the 26 companies despite the fact the it has not imposed a ban on telecom equipment from China by issuing an administrative document. This is still a ban in a disguised form, and maybe that is why the so-called blacklist has appeared in media reports.

No gains

Chinese telecom suppliers, with certain market competitiveness and gradual recognition by the Indian market, have suffered heavy setbacks over recent months.

Population is one of the most important factors for the development of the telecom industry. Given India's huge user base and fast-growing economy, India's telecom market is indeed very attractive to telecom suppliers from around the world.

Against the macro backdrop of the continued improvement in China-India bilateral relations and Chinese enterprises' overseas expansion since the beginning of the current century, a batch of Chinese telecom enterprises including Huawei and ZTE, and enterprises from other industries have had a presence in India and expanded in local markets.

With painstaking efforts, Huawei and ZTE have currently gained a market share of 21 percent and almost 13 percent, respectively, in India's telecom supply market. Among foreign telecom suppliers from other countries, Ericsson has a share of 20 percent, Nokia Siemens has 19 percent, and Alcatel has 14 percent.

It could be said that Chinese telecom enterprises have strong competitiveness in the Indian market and come to be recognized. Nevertheless, Chinese telecom enterprises have suffered heavy setbacks and gained nothing in the Indian market over recent months resulting from the initial ban to the security review and blacklist.

Some Indian industry insiders doubt the setbacks of Chinese telecommunications equipment makers were due to the trouble created by interests groups.

Analysts pointed out that the timing of ban was just before the upcoming issuance of 3G licenses in India, so it is nothing more than an attempt to shut Chinese telecom enterprises out of the first round of competition for India's 3G market through delays. The disclosure of the blacklist by the Indian media was perhaps due to moves by India's telecom operators, such as Tata and Reliance, to pressure their government to solve the Internet security review issue as soon as possible.

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