Indian state-owned telecom operator BSNL has announced that it canceled the 20 million GSM equipment order that it previously placed to the Chinese telecom equipment maker Huawei.

After a long negotiation, BSNL decided to place a purchase order of mobile communication equipment of 20 million GSM lines for India's southern zone to Huawei in November 2009. However, BSNL took the extreme action of order cancellation after Huawei raised its supply conditions. A spokesperson from Huawei refuses to give comments on this issue.

An executive from BSNL said that because the agreement was signed after a detailed negotiation, the company will not accept any ancillary conditions. The executive refused to reveal the contents of those additional conditions.

At present, BSNL is still talking with Ericsson about the GSM equipment bids for the northern zone and eastern zones of India, but no agreement has been reached yet.