The Hindu : Business : Government curtails BSNL’S GSM tender to half

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Thursday, Jul 19, 2007
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Government curtails BSNL’S GSM tender to half

P.K. Bhardwaj

Orders to be placed with Ericsson and Nokia-Siemens

Telecom Minister had sought changes in original contract valued at Rs. 20,000 crore
Both sides tightlipped on the final price

NEW DELHI: The Government on Wednesday curtailed the GSM tender of BSNL to half at 23 million lines and indicated that the telecom public sector undertaking would place the order with successful bidders — Ericsson and Nokia-Siemens — in a day or two.

At the same time, Swedish equipment supplier Ericsson announced that it had bagged a Rs. 8,000-crore ($2 billion) order from India’s largest mobile operator Bharti Airtel.

The BSNL announcement followed clearance from Telecom Minister A. Raja, who sought changes in the original contract valued at about Rs. 20,000 crore.

Chairman and Managing Director A.K. Sinha confirmed that the Advance Purchase Order (APO) would be placed by Thursday. It would be for both 2G and 3G services but the order for 3G would be placed only after the policy on services and spectrum availability was put in place.

The original tender was for 45.5 million lines. BSNL could not place the orders last year as the U.S. telecom vendor Motorola challenged the tender process over its disqualification. Mr. Raja, who took over from Dayanidhi Maran, wanted certain changes in the tender. He questioned the disqualification of Motorola and wanted BSNL to negotiate the prices with the vendors to bring them down to less than $90 a line from the $107 quoted by the lowest bidder Ericsson. Both sides have remained tightlipped on the final price at which the APO will be placed.As per the tender clause, Ericsson would get 60 per cent share of the revised contract or about 13.8 million lines. The remaining 40 per cent or 9.2 million lines would go to the second lowest bidder — Nokia- Siemens.

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