Indian govt bars Huawei from ITI sell-off

Dylan Bushell-Embling
24 Jun 2009

The Indian home ministry has reportedly banned Huawei from bidding for the assets of state-owned vendor Indian Telecom Industries (ITI).

Bidding for the loss-making manufacturer would be subject to security clearance, and the government is not comfortable having a Chinese company bid, the Economic Timesreported.

The ban applies for all Chinese companies, but Huawei is the only Chinese vendor to have expressed an interest.

Alcatel-Lucent has also shown interest in acquiring the three units on offer - loss-making manufacturing plants in Bangalore, Rae Bareli and Nainital.

The Department of Telecom said it would consider forming a JV with interested investors. ITI has long been losing money, and recorded losses of around $412.8 million in 2008.

The DoT last month set strict conditions on BSNL before allowing it to award Huawei a GSM contract, insisting the state-owned operator test Huawei equipment for backdoors and malware before deployment.

Security concerns may also have sank Huawei\'s ambition to buy out Nortel\'s Ethernet business earlier this year.

India is also planning to block copy-cat Chinese-made handsets from flooding the market because they of the danger of their batteries exploding, said.

Pankaj Mohindroo, national president of the Indian Cellular Association, said the batteries were like "little bombs". The association says that India imports up to 1.5 million replica handsets a month.

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