India To Inspect Chinese Telecom Gear

India is in the final stages of selecting IT security "gatekeepers" for all telecom equipment purchased from Chinese manufacturers, including Huawei Technologies and ZTE Corp, once again allowing the Chinese access to one of the fastest growing telecom markets in the world.

During the past few weeks, Indian authorities had threatened to revoke the right of Chinese businesses to sell equipment in India because of fears that the telecom gear may contain spyware. India and China have a strained relationship, and have fought border skirmishes as well as a small-scale war in the past.

India's Department of Telecommunications (DoT) has appointed British Telecom (BT) to consult on telecommunications equipment safety while a dedicated test lab and certification center is established at the Indian Institute of Science (IISc) in Bangalore. The IISc will eventually be able to detect the potential security threat of spyware but this facility won't be ready for one to two years.

In the meantime, international security firms such as Canada's Electronic Warfare Associates, Infoguard from the US and ALTAL Security Consulting from Israel have been appointed as security auditors.

India accounts for about $1 billion of ZTE's annual sales, or about 10 percent of its total. It has 2300 employees there. Meanwhile, Huawei said it earned about $1.5 billion in contract sales in the market last year, and about 4000 employees work there.

India has just conducted a 3G licence auction, raking in $14.61 billion, nearly double the price predicted prior to the auction. Many operators had planned on using Chinese operators to help them roll out these new networks, so the ban has placed a heavy burden on local operators who have had to cease equipment procurement pending the safety review of products from China.

Now the Indian government will allow mobile operators to import their own telecommunications equipment, pending bank guarantee to the Ministry of Communications. However a Chinese equipment manufacturer in India has pointed out that the Indian government is yet to publish the review of relevant safety requirements and regulations.