Govt asks BSNL, MTNL not to use Chinese Equipment for Network Upgrade: Report

On Thursday, a Senior Govt source said that the Govt has told 2 state-run telecoms firms to use locally-made rather than Chinese telecom equipment to upgrade their mobile networks to 4G. New Delhi's move comes amid a backlash against companies from China after the killing this week of 20 Indian soldiers by Chinese forces in a Himalayan border dispute. The instruction is aimed at Chinese telecom gear makers Huawei and ZTE, the source said, after India in 2019 announced an almost $8 billion plan, some of which was earmarked for network upgrades, to help loss-making operators Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL).

"Since that plan will be funded by public money they (BSNL, MTNL) should try to ensure they buy made in India equipment," the Govt source, who refused to be named as the order wasn't public, told Reuters.

India's department of telecoms didn't respond to a request for comment. The head of BSNL and MTNL didn't answer calls or messages seeking comment.

Huawei declined to comment and ZTE, which potentially risks losing tens of millions of dollars in orders, didn't respond to a request for comment. The Chinese embassy in Delhi did not immediately respond to a request for comment.

Chinese companies face a public backlash after the worst clash since 1967 between China and India, where anti-Chinese sentiment is already strong.

Beijing has also come under fire over the coronavirus outbreak, with social media campaigns urging Indians to boycott Chinese goods.

The effective ban on the use of Chinese network gear could extend to private telcos like Bharti Airtel and Vodafone Idea which also use it in their networks.

A telecom industry source, who has worked closely with Chinese telecom equipment makers, said, "There will probably be some communication... may be not a cease and desist, but a plea to avoid using Chinese equipment in core networks".

Any ban could increase costs for Indian telcos, which would have to rely more on European firms like Nokia and Ericsson, as India has limited domestic expertise in telecom equipment manufacturing.

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