In what may turn out to be major relief to Chinese telecom equipment manufacturers including Huawei and ZTE, the government on Wednesday amended licences issued to telecom service providers.

The government has made it mandatory for equipment suppliers to share the "source code" and the "design details" to address the security concerns.

“ZTE is very open and will comply with the requirements of the government. We will like to emphasis that we have the interests of our country formost and would not allow anything to happen which is a threat to our security,” said D K Ghosh, CMD, ZTE India Pvt Ltd.

The amended conditions also envisage that a penalty, equivalent to 100% of the contract value, shall be imposed on telecom equipment suppliers in case of detection of any security breach. Telecom operators also face a fine of Rs 50 crore for every purchase of equipment.

The Department of Telecom (DoT) officials said the information like "source code" (password) and "design details" would be kept in the escrow account in encrypted form and would be used only in case of security emergency.

Most of the telecom vendors, including Ericsson, had opposed to share the "source code" saying it is a proprietary information and cannot be kept in an escrow account. DoT asserted that this has been done for all vendors and is not limited to vendors from China. Two telecom operators' association COAI and Auspi did not offer any immediate comments and said they will react only after studying the amendments in detail. Main telecom vendors are Ericsson, Nokia-Siemens, Alcatel Lucent and Chinese players like Huawei and ZTE, among others.

The Department of Telecom has sent the amended licence agreement to all the operators for their consent. The DoT is also understood to have included a clause, which mandates that Indian engineers operate and maintain the networks of telecom service providers.

The amendment comes in the wake of concerns being raised by the security agencies regarding the core telecom equipment imported from China.