Huawei bags BSNL contract for core IP network

State-owned BSNL will shortly award a crucial equipment contract to China's Huawei for expanding its countrywide core Internet network, that may stoke fresh security concerns over procurement of telecom gear from Chinese vendors.

Top executives with direct knowledge told ET that BSNL's core IP network will be capable of handling data, voice and video traffic, and would be the principal communications backbone carrying sensitive personal information of Indian citizens for a host of central broadband initiatives like the national optic fibre network (NOFN), the National Knowledge Network and the government's ambitious Aadhar program that plans to give a unique identity to the country's 1.2 billion residents.
Sources in the communications ministry conceded there is pressure to keep Chinese network vendors out of sensitive projects on security grounds although the Indian government is yet to take any definite stand on a recent report by the US Congress Panel about Huawei andZTE posing a security threat owing to their reported links with the Chinese military.

Both Huawei and ZTE have denied these allegations levelled by the US, but have reportedly agreed to reveal there source codes to the Indian government to ease security concerns.

BSNL's chairman & managing director RK Upadhyay did not reply to ET's specific email query on the security implications of buying equipment from Huawei for its core IP network expansion, but asserted that the state-run telco ensures strict compliance with DoT's security guidelines in all its procurements.

"BSNL, in all its procurements, follows security guidelines issued by DoT," wrote Upadhyay in a text message, adding that "this process is also in accordance with the company's procurement manual".

The state-run telco, it is learnt, had little option since Huawei and ZTE were the sole bidders for upgrading its IP core network, internally known as 'MNGT' or MPLS-based next generation transport system.

State-owned research body C-DoT has already exhorted the telecom department to isolate Huawei and ZTE from sensitive government projects on grounds that both companies have been barred from competing in US tenders on security grounds, following which several European countries, Australia and Canada have also reportedly stopped buying from them.

In fact, the telecom ministry had sought Cabinet nod earlier this year to keep foreign vendors out of "sensitive projects", which included the Rs 20,000-crore NOFN initiative to lay optic fibre connecting all panchayats in the country.

The government has already unveiled a new security framework which requires telcos to get their networks audited once a year by reputed international agencies for bugs and other security breaches. Prior to these norms, security concerns, especially regarding Chinese gearmakers, had rocked India's telecom sector for nearly two years, delaying expansion plans of several mobile phone companies.

DoT has also unveiled norms to encourage domestic manufacturing of network gear, under which, mobile operators are mandated to source 80% of their gear and related infrastructure from domestic makers by 2020.

It has said that companies owned by Indians and located here must get 65% of all telecom network orders by 2020. Which means the manufacturing units of Ericsson, Alcatel-Lucent,Nokia Siemens, Huawei and ZTE among others will account for 15% of equipment orders by 2020.