Ericsson has refused to bid for BSNL's $450 million GSM supply tender, in protest against the government's demands for vendors to share their source codes.
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, with and specify tough penalties for breaches. This has left operators with a strong incentive to ensure compliance.
In an email sent to Dow Jones, Ericsson said it was still in talks with Indian officials over the escrow concept, and therefore refused to adhere to the requirement.
The length of BSNL's process for deciding winners of major tenders also discouraged Ericsson from participating, Dow Jones reported. Ericsson is one of BSNL’s incumbent GSM vendors.
Rivals Alcatel-Lucent, NSN, Huawei and ZTE have all submitted bids for the 5.5 million line tender.