Kathmandu – Nepal Telecom has moved ahead with plans to award its billing system contract to Chinese company Huawei, despite the firm proposing to use equipment from a supplier already blacklisted by the company.
During the tender process, Huawei was the only bidder declared technically successful. At first, it proposed Intel equipment that had already reached its 'end of life.' Later, the proposal was amended to use hardware from Inspur, a Chinese company banned by Nepal Telecom and also restricted by Oracle. By altering what was supposed to be a sealed tender, Huawei’s bid was legitimized.
Officials say the change was engineered from inside Telecom to secure the deal for Huawei. This decision ignored regulatory advice, expert warnings, and even a Supreme Court order. Instead of scrapping the process at the start, Telecom amended its documents and declared Huawei technically qualified, paving the way to request its financial proposal.
In the past, single-bid tenders were cancelled. But in Huawei’s case, exceptions were made. Critics warn that giving one vendor control over core, RAN, and billing systems increases manipulation risks and weakens system security.
The tender also accepts outdated hardware. For example, Intel’s 2.4 GHz processors were approved instead of the latest 2.7 GHz. Similarly, RISC processors were capped at 2.4 GHz instead of 5 GHz.
Experts note Huawei lacks access to new equipment after 2019, when the U.S. and Europe imposed restrictions. The criteria appear designed to suit Huawei’s old stock, allowing the company to win with cheaper, inferior equipment.
This raises fears of Huawei gaining a monopoly over sensitive systems, leaving Telecom locked into one vendor and eroding its competitiveness. Insiders say political pressure has driven the management’s decisions, with Chinese lobbying and the support of leftist leaders helping Huawei. The current Communications Minister is also seen as sympathetic to the company.
Huawei’s 4G record under fire Huawei’s past performance in Nepal Telecom’s 4G project has already drawn criticism. Despite failing to complete all project work, the company managed to secure clearances through political influence. Investigations by the telecom regulator and user complaints show that Telecom’s 4G service has underperformed because of Huawei’s equipment.
Most of the 4G hardware was supplied through Hong Kong-based CCSI, which repeatedly violated contracts by installing inferior Chinese-made antennas instead of those promised from the U.S. and Europe. This breach is now being probed by the anti-corruption watchdog.
Huawei also failed to install 6,000 'small cells' required to expand coverage in dense areas and remote locations. Worth about Rs 7 billion, this work was never carried out, directly weakening 4G service quality. As a result, coverage has been patchy, with signals failing in basements, edge areas, and difficult terrains.
Despite these failures, Huawei is now positioned to control Telecom’s billing system as well. Analysts warn this will deepen vendor lock-in, increase costs, and undermine Telecom’s competitiveness.
