The Hindu : Business : BSNL’s GSM network expansion hits roadblock

Online edition of India's National Newspaper
Saturday, Nov 24, 2007
ePaper

Business

Business

BSNL’s GSM network expansion hits roadblock

Special Correspondent

Nokia Siemens Networks opts out of the contract

BSNL exploring three options
Ericsson starts work on the contract

NEW DELHI: State-run telecom major Bharat Sanchar Nigam Limited’s (BSNL) plans to expand the GSM network has hit a roadblock with Nokia Siemens Networks (NSN) having refused to accept its share of the 22.5-million-lines contract due to differences on the price issue.

Ericsson was awarded 60 per cent of the total contract and NSN, being the second lowest bidder, was given the balance. Ericsson had quoted about $107 per line, while NSN quote was about $167.

Mr. Goyal said Ericsson had started its work on the contract and equipment supply would start in a couple of months.

Addressing a press conference here on Friday, BSNL Chairman and Managing Director, Kuldip Goyal, said price difference was the main reason for NSN not accepting the order but added that negotiations were still going on. “We are exploring three alternatives — award of whole contract to Ericsson, talking to BSNL’s existing vendors for add-on capacity and finally floating a fresh tender — he added. The final decision on the issue was expected to be taken within a month.

Asked whether Ericsson was willing to accept the full order, Mr. Goyal said BSNL would write to Ericsson on the matter.

He also indicated that in case of fresh tender, the PSU might do away with the clause of having manufacturing base in India that was a must to participate in the tender. Deletion of this clause would allow more companies, especially from China like ZTE and Huawei that have not been able to set up manufacturing facilities in India, to participate in the tendering process.

Motorola, which was disqualified on technical grounds, had challenged its disqualification in the court but later withdrew the case. This had led to the delay in the tendering process by about eight months.

BSNL has been losing its market share and subscriber addition has been falling due to capacity crunch.

It now has a capacity of providing five million lines, which will be exhausted in the next 2-3 months.

Printer friendly page
Send this article to Friends by E-Mail

Business