Chinese telcos may set up manufacturing facility in India

The idea was mooted by the Chinese Ambassador during his meeting with Telecom Secretary P J Thomas recently, sources in the know of the development said. Meanwhile, the government has also asked operators to acquire security clearance before buying any key telecom gear from foreign firms.

The Department of Telecom (DoT) has circulated draft guidelines that telecom companies need to meet with regard to security issues, and has asked the industry to give their views on the same. "On security clearance, the DoT has circulated a draft among the stakeholders. We have received comments from some players while, from others, these are still awaited. Once we get all, we shall come out with a mechanism in consultation with the Ministry of Home Affairs," Thomas had said recently.

It had proposed that telecom companies be allowed to import the equipment from foreign suppliers only after an International Certification Agency visits the vendor's plant and gives a security clearance. Several operators have approached the government to expedite the process as their rollouts were getting delayed in the absence of security clearances for buying equipment from Chinese firms.

Especially in the case of 3G and Broadband Wireless rollouts, in which operators have paid heavy amounts to acquire spectrum, the players are looking forward to early clearances from the government.

One of the operators said that in the absence of Chinese firms, they are being made to pay more to procure equipment from Western manufacturers, and the increase in cost may be passed on to end users/subscribers.

The government is also proposing to make it mandatory for Indian engineers to operate and maintain the networks. As per the proposed amendment, the Department of Telecom (DoT) has said, "The licensee (telecom firm) should work towards a phased plan to take over maintenance of the equipment locally... The operations and maintenance of networks should be done entirely by Indian engineers, and dependence on foreign engineers should be minimal and or almost nil within a period of two years from the date of this amendment."

The new amendments also made room for an Escrow deposit arrangement between the equipments suppliers and telecom service providers, wherein the suppliers shall keep all the information and documentation relating to the supplies. However, it is yet to be ascertained whether the new amendments are going to make it easier for foreign vendors, especially Chinese ones, to supply equipment to Indian operators.