Telecom Equipment Makers Gain As India Tightens Procurement Rules
The latest amendment mandates wireless service providers to buy only from suppliers designated as trusted sources by government.
Shares of ITI Ltd., Tejas Networks Ltd. and Indus Towers Ltd. gained after the government tightened the rules for supplying telecom equipment.
On Monday, the telecom department amended the licensing conditions for procurement of telecom equipment, mandating wireless service providers to buy only from suppliers designated as trusted sources by the government, according to its notification.
“With effect from June 15, 2021, the licensee shall only connect trusted products in its network and also seek permission from designated authority for upgradation or expansion of existing network utilising the telecommunication equipment not designated as trusted products,” the notification said.
The move will prevent Chinese equipment providers such as Huawei and ZTE from supplying gear to Indian wireless service providers. It also comes amid probes in India on Huawei, ZTE, Xiaomi, Oppo and Vivo for tax evasion and FEMA violations.
On April 30, the Enforcement Directorate has seized Rs 5,551.27 crore from Xiaomi Corp.’s local unit for violating the country’s foreign exchange rules, PTI reported citing the investigative agency’s statement. On May 30, Bloomberg reported that India has launched investigation on local units of ZTE, Vivo Mobile for alleged financial improprieties, citing documents that it accessed.
The S&P BSE Telecom was one of the top gainers in Tuesday’s session.
