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Tough telecom rules spark foreign backlash
Published on 5 Aug. 2010 1:16 AM IST
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Telecom companies and trade groups are urging India to soften tough new security regulations on foreign telecommunications companies — believed to be aimed at China — which they say could set a troubling global precedent for onerous security norms. India’s telecom infrastructure is being built almost entirely by foreign companies. That has raised concerns that the nation’s vast mobile phone network — by far the most comprehensive communication system in a country with relatively few landlines — could be vulnerable to foreign infiltration, particularly from China, stated the Associated Press.
At stake are billions worth of contracts for companies like IBM, Cisco, Ericsson, Nokia, Huawei Technologies and ZTE in the world’s fastest growing mobile market. Under guidelines proposed last week, foreign equipment makers must allow regular security inspections and make their network design and source code — proprietary information used to run a network — available to Indian government. Companies would also be subject to large penalties and blacklisting for security breaches, and would have two years to replace foreign engineers with local hires. On July 27, 11 US trade groups appealed to secretary of State Hillary Rodham Clinton to get the Indian government to suspend implementation of the new rules.
‘‘Not only do India’s new telecommunications security requirements raise potential WTO compliance concerns, if they remain unchallenged, other governments may use them to justify their own elaborate information security regimes,’’ they wrote in a letter. ‘‘India’s approach is establishing a dangerous precedent.’’ The next day, 20 groups from the US, Europe and Japan fired off a letter to India’s home, technology and commerce ministers, calling the proposals ‘‘a nonstarter.’’
India began the crackdown in December, by requiring companies to get a government security clearance on telecom equipment orders. Since then, billions worth of procurement orders — industry estimates range from $1 billion to $5 billion — have languished awaiting security clearance. China’s Huawei and ZTE have a backlog worth an estimated $750 million.
Nokia Siemens said Q2 sales fell 5%, to euro 3 billion ($2.2 billion), mostly because of sales blocked by India’s security issues. Ericsson’s quarterly India sales plunged 63% for largely the same reason.
Analysts and executives say India’s security concerns are not unreasonable but that the measures go beyond international norms. ‘‘We deeply respect and support the steps taken to beef up security,’’ said Ericsson India vice-president P Balaji. ‘‘However, we feel that some of the clauses are unprecedented. We request a dialogue to ensure that the security concerns can be balanced with good international practices.’’
Telecom department spokesman Satyendra Prakash said telecom devices have been misused in the past, and India’s response to security problems is in line with what other countries are doing. The government wants to prevent spyware and malware and has built-in safeguards so source code would only be accessed if there is a security breach, he said.
He declined to comment on the letters. Officials at the home ministry did not return calls seeking comment.

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