China’s Whale Cloud won Rs 500-cr BSNL project months before Galwan clash: Report

A crucial backend project worth Rs 500-crore of the state-run telecom operator Bharat Sanchar Nigam Limited (BSNL) was awarded to a Chinese firm, Whale Cloud Technology with links to gear maker ZTE, months before the Indo-China clash in the Galwan valley in June 2020, Indian Express reported recently.

The report added that despite a “protectionist stance” adopted by the New Delhi subsequent to the clashes, BSNL persisted with the Chinese firm till its completion.

The deal involved the development of new systems for BSNL’s call data record centres, as per the report. It said the deal was routed to BSNL through the state-owned Telecommunications Consultant of India Limited (TCIL).

Whale Cloud Technology was a ZTE subsidiary. In 2018, after a strategic investment, it became a part of another Chinese giant, Alibaba, the report said.

In 2018, Whale Cloud Technology had also signed a Memorandum of Understanding with BSNL to provide the telco with its strategic advice and vast portfolio of digital solutions, including AI & IoT based solutions/applications, smart city solutions, cloud-based applications and big data applications and solutions for BSNL business customers.

In particular, BSNL is a strategic company since it operates in border areas and regions affected by Left-wing extremism, where it is often the only telco to provide services.

Recently, the Centre has allowed ZTE to provide optical transmission equipment worth Rs 200 crore to Vodafone Idea for a network upgradation project, ET separately reported.

ZTE along with rival Huawei have also reportedly submitted additional documents to the National Security Council Secretariat (NSCS) for getting approval as a ‘trusted source’, a pre-condition for being eligible to supply telecom network gear under fresh contracts.

To be eligible for fresh telecom network equipment contracts, a supplier needs to be tagged by the NSCS as a ‘trusted source’, and the gear as ‘trusted product’.

The trusted source tag is given to a company after over 10 ministries, including home, external and communications, do the due diligence to ensure there is no security threat.

The government had launched the Trusted Telecom Portal in June 2021 to safeguard networks in the country. The security clearance was part of the directive which mandated that operators can only procure equipment from trusted sources and that too, gear tagged as ‘trusted product’.

However, the directive does not apply to expansion or upgradation of existing network.

In 2022, Huawei had won a telecom infrastructure expansion contract worth Rs 150 crore from India’s second largest telecom operator, Bharti Airtel. The deal was given to Huawei was part of an ongoing Airtel process to upgrade and expand its National Long Distance (NLD) network which is run by the Chinese vendor. Airtel, in 2021, had awarded a similar contract to Huawei worth Rs 300 crore, ET reported earlier in 2022.