The Chinese ghost is back to haunt the telecom sector. This time it is over equipment that a private operator has contracted to buy from Huawei Technologies and ZTE Corporation financed by loans from state-owned Chinese banks. India's external intelligence agency, the Research and Analysis Wing, has pointed to Huawei's links with the People's Liberation Army of China in an apparent objection to the import deal. To be sure, this is not the first time that Chinese telecom companies are in the news for the wrong reasons. A couple of years ago, state-owned BSNL was forced to cancel a contract awarded to these same companies following objections raised by security agencies. The concern was that foreign agencies could take control of the communication network during a hostile situation through embedded software, or use it to snoop on India. The government then placed an informal ban on imports of telecom gear from China and when the operators protested, it allowed such imports subject to guidelines, one of which was that the supplier should submit the source code for the embedded software.
Let's get this straight. If the concern is over security of imported telecom equipment, it cannot be about any one country or company. The two Chinese companies in question may have links to that country's security agencies but arguably, equipment sourced from any other company or country can be bugged too. Worse, if they so wish, foreign security agencies can even try and bug networks in India that are already running. It is not necessary that they have to do it only when equipment is bought from their country. Faced with such risks, the government has two options. One, it can ban telecom gear imports and direct operators to source all such equipment from within India. But that will be knee-jerk and is a sure fire method to put down the booming telecom industry of the country. The second and more pragmatic option is to develop counter-measures aimed at containing precisely the threat that the intelligence agencies are concerned about. The government should prod these agencies into investing in technology to deal with such threats rather than seeking a ban on imports, which is all too easy and convenient an option. Simultaneously, it should involve the telecom industry in a dialogue to devise a comprehensive policy on equipment imports without compromising on the country's security. Operators go to China for its cheaper prices and easy availability of finance which in turn helps them to offer low tariffs for their services. The government should bear this in mind while framing its policy.