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Tuesday, October 5, 2010

Ericsson has opted to not bid on a major contract with India’s state-run BSNL. Ericsson said it objected to a government condition requiring bidders to submit software and hardware codes for third party inspection. Alcatel-Lucent, Huawei, ZTE and NSN all submitted bids for a contract, valued at USD451 million, to supply equipment for BSNL's project to add 5.5 million wireless users to its network, BSNL officials said Friday. In July, India’s government made it compulsory for equipment makers to submit software and hardware codes related to products due to fears that imported equipment could be embedded with spying technology. Therefore, BSNL added the requirement that bidders submit the codes to escrow. In a statement, Ericsson said it is still in talks with the Indian government regarding the escrow requirement for telecom contracts and therefore cannot adhere to BSNL’s requirement at this juncture. In DI, Jan Dworsky, telecom analyst at Handelsbanken, emphasized that India is still a small part of Ericsson’s total sales, and that a solution to the current problems there is more than likely, considering Ericsson’s importance to Indian telecom operators. (Dagens Industri, Wall Street Journal)

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