However, the decision is not going to hurt the Chinese vendors other equipment contracts in the country, analysts say.

 

State-owned BSNL had awarded the contract to Huawei last month, but the Indian company told the state news agency Press Trust of India that the deal had been canceled because of Huawei “imposing conditions” on the order.

 

“There was no scope for accepting conditions as the order was placed after detailed negotiations and as a government owned firm we (BSNL) do not accept conditions,” the official was quoted as saying.

 

He did not elaborate on the conditions, and neither company is saying anything on the record.

 

In New Delhi, emails and calls to the BSNL Chairman’s office on the issue went unreturned. It was a similar story at Huawei’s headquarters. “Huawei is unable to comment on this matter due to a fluid local market situation,” said Thong Poh Wah, regional PR director, Asia Pacific, Huawei.

 

While the cancellation will hurt Huawei’s revenue growth in India this year, it won’t affect the company’s business prospects with other telecom operators in India, says Amit Gupta, principal analyst for Emerging Markets at Ovum.

 

“Unless the government bans Huawei in India, private operators will continue giving it contracts. As long as it makes business sense and the product is good, they are fine.” This summer, Indian security agencies launched a probe into Huawei’s expansion plans in the country because of the company’s reported links to the Chinese military.