If the telecom equipment tussle between India and China were a game of snakes & ladders, China just climbed a short ladder.
In its latest move, hailed as major victory for Chinese telecom equipment providers by India, BSNL – Bharat Sanchar Nigam Limited, the Indian state run telecom and internet provider has included ZTE and Huawei in its new tender of GSM services for the North and Eastern Zones including the politically sensitive areas of Jammu & Kashmir and the seven states in the North East close to the China – Bangladesh border including Assam. The tender is to procure equipment and install 5.5 million telephone lines in the strategically sensitive and yet relatively remote regions. Other bidders for the tender include Ericsson, Nokia-Siemens Network and Alcatel Lucent.
This tender come just days after Huawei clinched a plum 3G network equipment contract from Tata Teleservices, and ZTE Corp landed a Rs 3 million contract to supply WiMax systems to BSNL for its broadband rollout.
The tender which includes Chinese firms in North East India comes as a surprise especially after India banned Chinese telecom equipment providers seven months ago, continues to have frequent skirmishes over the disputed border and has in the past discriminated against Chinese telecom equipment providers on the basis of their nationality. While experts feel this is a momentarily good will measure expressed towards Chinese telecom firms, neither ZTE nor Huawei are expected to win the tender.
Owning to widening trade imbalance between the two countries, India has been pleading with China to open its markets further. In exchange China has asked India not to impose trade restrictions and anti-dumping duties on its products. Being emerging markets and proximate to each other, both India and China are huge markets that each are trying to tap into, unfortunately security and political issues often play a dampener.