Ericsson has refused to bid for Indian carrier BSNL's $450 million (€326 million) GSM supply tender, in protest against the government's demands for vendors to share their source codes.
The vendor said rules requiring it to place hardware and software codes in an escrow account to allow scrutiny of communications by security forces are not in line with India’s current agreed government guidelines for tenders, and that it could not adhere to the requirement as a result.
However, the firm is in talks with Indian government officials over the strict rules on foreign equipment, a spokesman told Telecoms Europe.net.
“It is well known that Ericsson, some other western players and industry associations have already voiced their concerns with the Government of India,” the spokesman said.
He also blamed the “onerous and time consuming acceptance procedures” of the tender for the decision, noting the firm has seen no return on heavy capital investment, despite BSNL benefitting from equipment the firm has already supplied.
Under proposed new security rules foreign vendors are required to place software and hardware designs into escrow for possible scrutiny by security authorities in order to participate in network infrastructure tenders.
The rules have been put on hold, but they put the onus for compliance on operators, and specify tough penalties for breaches.
It is hard to say if Ericsson would have been more compliant if BSNL had not cancelled a planned tender for 93 million lines, worth around $10 billion.
Ericsson would have rolled out 38 million lines in a slice of the aborted deal, which would have been worth $2.5 billion.
The current smaller project involves rolling out 3.4 million lines in north India, and 2.1 million in the south.
BSNL is evaluating bids from firms including Alcatel-Lucent, NSN, Huawei and ZTE, and is due to decide on the winner by the end of the month.