Telcos face tighter norms for equipment imports

NEW DELHI: The government has decided to tighten security provisions for all imported telecommunication equipments following fresh intelligence inputs over possible misuse for anti-national activities, but this could lead to delays in equipment procurement. The measures under consideration include reducing the validity period of security clearance given to telecom service providers for import of equipment from two years to six months, two senior officials in the government said, requesting anonymity.

Besides, major vendors such as Ericsson, NSN, Huawei, ALU, ZTE, Motorola, CISCO, Juniper, Tekelec and Comverse will not have any general security clearance.

Security clearance to a specific equipment for import by a particular telecom operator would not necessarily mean automatic approval for others for that particular item. Importers will be required to take security clearance for vendors each time an order is placed with a foreign manufacturer. The telecom ministry’s proposal is based on inputs given by intelligence agencies and the home ministry, one official said.

“The proposals for equipment import has to be examined from national, physical and commercial security angle. It is thus not possible to accord general security clearance to vendors. Security-related issue is a continuously evolving process,” one of the two officials said. Earlier, security agencies had warned of threats from Chinese equipment, specifically in certain circles.

“The government should streamline the process of granting security clearances so that undue delays are prevented. Delay in the competitive telecom market could have severe revenue implications on companies as they may not only lose market share but may also face penalty from regulators. Moreover, if security concerns limit equipment vendors, cost of services could also rise,” said KPMG head of telecom Romal Shetty.

The ministry may, however, consider an exemption for passive infrastructure equipment from security clearance procedure. Passive equipment include items such as diesel generator sets, test and measurement equipment, connecting cables, spanners, wrench, connectors, pliers, drill machines, tower material, power plant and its accessories.

The home ministry has already rejected a proposal from industry associations to also exempt servers and software from the ambit of such security clearance.

The telecom ministry had last month amended the procedure for obtaining security clearance from the government before the procurement of equipment, making it mandatory for the mobile telephone service licensees to provide details about the equipment, its supplier and original equipment manufacturer before placing the final purchase order for procurement.

The same procedure has to be followed while placing an order for upgradation of equipment, software for provisioning telecom services.

The telcom industry had opposed the proposal arguing that such disclosures could seriously jeopardise their commercial interest as sensitive information relating to purchase would come in public domain. The Cellular Operators Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI) had also said that changes in security regulations will also delay execution of projects.