DoT Announce Changes in Telecom Equipment Procurement

On Wednesday, DoT, or the Department of Telecommunication under the Ministry of Communication, announced the much anticipated changes in telecom equipment procurement license. The said changes have come after much anticipation about them. Notably, the DoT has amended the Unified Access Service License Agreement, adding a sub-clause to it. Therefore, this sub-clause will have far-reaching consequences.

New Sub-Clause added by DoT

The apex authority on Telecom has added sub-clause 41.6A(iii) (a.) to the UASL Agreement, in Security Conditions. It starts with:

The Government via the Designated Authority will have the right to impose conditions on procurement of Telecommunications Equipment on grounds of Defence of India, or matter directly or indirectly related thereto, for national security.

The Government is clearly looking to safeguard against the potential risk of espionage from non-friendly countries of origin. Firstly, this amendment seeks to reduce the amount of Chinese telecom equipment in the country. For example, many of China's telecom equipment makers such as Huawei and ZTE are facing huge scrutiny for alleged espionage. Second, the US and much of the EU have stated their intention to focus on European suppliers, so this looks as a show of support.

The Designated Authority will be the National Cyber Security Coordinator. Their first role will be to create new categories of sources and products known as Trusted Sources and Trusted Products. Incidentally, there are four key documents compiled by the Designated Authority,

• First, a list of Trusted Sources, that is, vendors which are safe and from friendly regions.
• Second, a list of Trusted Products, that is, equipment which are safe as per the NCSC.
• Third, a list of sources from where no telco can procure any components.
• Fourth, a procedure to become a part of Trusted Sources for vendors.

These documents will be issues by the Designated Authority before the actual implementation of the amendment. That amendment will come into force on 15th June, 2021. Furthermore, the notification noted that this amendment will be the "part and parcel" of any future Agreements.

Interestingly, this amendment will not affect Annual Maintenance Contract (AMCs) of any licensees or vendors.