Tatas cry foul over ban on Chinese vendors

HARSH CALL DEFER 3G ALLOTMENT

THE informal ban on import of Chinese telecom gear has led to an ugly spat among mobile phone firms. The Tatas, who operate the country's fifth-largest mobile company, have demanded that the Centre withhold allotment of third-generation (3G) spectrum to successful bidders till the new guidelines on security clearance for equipment import are in place. Successful bidders are scheduled to get 3G airwaves on September 1.
    Even as the Centre maintains that there is no ban on imports from Chinese vendors, Tata Teleservices has said the telecom department is currently clearing only equipment imports from Western vendors. Large GSM-based telcos such as Bharti Airtel, Vodafone Essar and Idea Cellular mostly import gear from Western vendors.
    "By virtue of permitting sourcing of equipment from particular vendors and not allowing others, it vitiates the principle of level playing field and thus means extending the advantage to a few of the successful 3G bidders to order their network upgrades," the company said in its communication to telecom secretary PJ Thomas. Tata Teleservices has also demanded that the department of telecom (DoT) put all 3G airwaves allocation on hold until security-related issues are resolved. GSM operators hit back
LEADING GSM operators have hit back, saying both Tata Teleservices and Reliance Communications (RCOM) are already operating 3G services 'illegally' and are now attempting to delay the launch of similar high-end services by competition.
    "In the case of CDMA telcos, both 2G and 3G services are offered using the same airwaves or spectrum—their data offerings such as high-speed internet through data cards are nothing but illegal 3G EVDO services," said a top executive with a leading GSM operators.
    Vodafone Essar had recently approached DoT alleging that RCOM and the Tatas are already offering 3G services and should be charged higher levies that are applicable to 3G operators. An executive with another GSM telco pointed out that COAI, the industry body representing GSM operators, has been campaigning for the Centre to take 'penal action' against their rivals for operating 'quasi 3G' services in the country.
    A top telecom department official, directly involved in the recently-concluded 3G and broadband spectrum auctions, said the Tatas' demand for level playing field with relation to equipment imports was valid, but added the government may find it 'practically impossible' to delay awarding 3G airwaves. "The Indian government has signed a contractual agreement with all successful bidders in the auctions and any delay will amount to violation of this contract. The letters of intent have been issued. The money for the spectrum has been collected. The government will have no legal standing to delay awarding these airwaves," this official added.
    The spat has taken another twist as AUSPI, the industry body representing telcos such as Tatas and RCOM, has now accused GSM telcos of delaying the process of formulating new security guidelines for import of network gear. It has said the consultation process on revised security guidelines has been held up as GSM telcos are yet to submit their views on it. AUSPI also said all other stakeholders have submitted their views and demanded that the government finalise new guidelines at the earliest and not wait for participation from the GSM lobby.
    "It is requested that the model template may kindly be finalised immediately without waiting for comments from COAI, and allow our members immediately to import equipment," AUSPI said. But COAI director general Rajan S Mathews said the association has given its views, and while added that there are no differences between mobile phone companies on the proposed security guidelines.
    Earlier this year, the central government had stopped approving import of Chinese telecom equipment after the home ministry and the Prime Minister's Office expressed concerns that it posed a threat to national security. But after protests from both operators and Chinese vendors like Huawei and ZTE, the government came up with a temporary solution, which involved allowing import of Chinese-made telecom gear certified by international security audit firms. The government had last month also decided to allow self-certification of imported telecom equipment by mobile operators against a bank guarantee given to the communications ministry. The government said these interim norms would be replaced by detailed security guidelines that would be issued soon.
    But Chinese gear maker Huawei and operators such as RCOM and Tata complain that even after the self-certification process was introduced, the government has only been clearing orders placed on Western vendors. "Equipment from Chinese vendors should be cleared where self-certification has been provided by operators. Only once the revised guidelines for security clearance of equipment are released, must 3G equipment ordering be allowed…" the Tata Teleservices communications added. Last week, RCOM had also approached the telecom department saying the ban on Chinese gear was delaying the expansion of its 2G services and would also delay its 3G launch, if not addressed immediately.
    "It is understood that security clearance has been given to service providers that are importing equipment from European vendors like Ericsson, Nokia Siemens as their networks are primarily based on technology from these vendors. But in the case of Reliance, we have deployed technology from Huawei, ZTE and import of equipment from these vendors being Chinese is not allowed at present. This is creating a non-level playing field between us and incumbent operators," RCOM said in a letter to DoT.

NETWORK ERROR