India seeks more security information from ZTE
Credit: Reuters
(Repeats story issued late on Thursday)
* ZTE officials, Chinese ambassador meet home secretary
* Indian home ministry wants clarification, more information
* Chinese envoy hopes security issues to be resolved soon
(Recasts, adds quotes, details)
NEW DELHI, May 13 (Reuters) - India's home secretary on Thursday asked China's ZTE Corp (0763.HK) for more information on security, giving the telecoms gear firm an opportunity to make its case for why it should be able to provide equipment in India.
Officials from ZTE and G.K. Pillai, secretary at the Ministry of Home Affairs (MHA), met on Thursday after India barred telecoms operators in the country from ordering equipment from ZTE and larger Chinese rival Huawei Technologies [HWT.UL].
New Delhi has denied any country-specific ban though it has made it mandatory for carriers to obtain security clearance from the telecoms ministry before placing equipment orders.
The dispute, centred on Indian concerns Chinese equipment may have spying technology embedded, risks growing into a diplomatic row between the giant neighbours, who have long been suspicious of each other and fought a war in 1962.
A series of attacks on Indian government websites by suspected Chinese hackers in recent months has also hardened the authorities' position on importing potentially sensitive equipment from neighbouring countries.
India is the world's fastest-growing wireless market with operators signing up 16 million new users a month on average. Global mobile equipment makers are fighting to win lucrative contracts in Asia's third largest economy.
Officials from ZTE and the Chinese ambassador to India separately met India's home (interior) secretary in efforts to allay New Delhi's security concerns. Pillai is in charge of internal security.
"They discussed issues relating to security clearance for the product of the company," India's home ministry said of ZTE's meeting with Pillai.
"Home secretary sought some clarifications and additional information. Once this is received, MHA will process the matter further," the ministry said in a statement.
Separately, a senior home ministry source told reporters India had asked for clarity on issues including company ownership details, certification of the equipment to be supplied and also to which other countries the equipment is being supplied.
The source, who declined to be identified, said the ministry expected to receive the clarifications within a month.
Zhang Yan, China's ambassador to India, met Pillai separately on the security clearance issue.
"We had a very good discussion," he told Reuters after the meeting. "I hope all the issues will be resolved soon."
SECURITY CONCERNS
Last year, India directed state-run telecoms firm Bharat Sanchar Nigam [BSNL.UL] not to procure equipment from Chinese vendors in 15 border provinces, citing national security.
India has long been suspicion of China's growing military clout and fears Chinese telecommunications equipment poses a security risk. Huawei's founder was an officer in the People's Liberation Army.
ZTE said on Wednesday it had been told by telecoms operators that its equipment had not met Indian security tests necessary to be allowed to supply equipment to carriers in India.
"We had a word, the talks are going on. And we have appealed to the government. We have put forward our thoughts and let's see," ZTE's India unit chairman, D.K. Ghosh, told reporters on Thursday after meeting Pillai.
Huawei and ZTE are taking a series of measures to ease New Delhi's security fears and have said they are contemplating building factories in India. [nSGE64B0C1] ZTE shares rose 6.5 percent in Hong Kong on Thursday after the firm said on Wednesday it would consider setting up a plant in India.
BOOMING MARKET
Shenzhen-based Huawei and ZTE have taken on global names like Ericsson (ERICb.ST), Nokia Siemens Networks [NSN.UL] and Alcatel Lucent (ALUA.PA) in recent years, winning major contracts in both emerging and developed markets and are active in India.
Huawei more than doubled revenue from India during the year to March 2009 to 62.4 billion rupees ($1.4 billion) and ZTE generated 48 billion rupees in the same year, according to data compiled by technology publisher CyberMedia.
India is currently auctioning third-generation (3G) mobile spectrum and plans to allot radio waves to telecoms operators by September. Investments in 3G networks would also expand gear makers revenue from India.
(US$1 = 45.07 rupees)
(Writing by Devidutta Tripathy; editing by Tony Munroe)
((devidutta.tripathy@thomsonreuters.com; +91 98187 86430; Reuters Messaging: devidutta.tripathy.reuters.com@reuters.net))
((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: INDIA SECURITY/ZTE
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