Ericsson accepts BSNL’s GSM tender

State-run telecom firm BSNL’s plans to expand mobile network are finally ready for take off with Swedish telecom vendor Ericsson on Thursday accepting the GSM equipment contract and submitting bank guarantee.

Ericsson has paid the guarantee and accepted the order for laying GSM lines, BSNL sources said.

BSNL will now offer an advance purchase order (APO) to Nokia-Siemens, the second lowest bidder for the remaining quantity of the GSM tender. The public sector firm plans to lay a total of 14 million 2G normal voice lines in the tender.

The PSU had placed an Advance Purchase Order with Ericsson on July 18 and the Swedish equipment supplier had time till August 3 to submit bank guarantee.

With this, the long-delayed process of capacity expansion of BSNL network is about to start. BSNL has already lost substantial market share due to this delay.

Although BSNL was able to lower the price from the earlier $107 per line, it took about two months and the whole tendering process took about one-and-a-half years.

The government had earlier curtailed the GSM tender to half at 23 million lines from the original 45.5 million lines.

The purchase order was placed after BSNL got directions from Communications Minister A Raja, who had sought changes in the original contract valued at about Rs 20,000 crore as approved by his predecessor Dayanidhi Maran.

The order for 3G would be placed only after the policy on third generation services and spectrum availability is put in place.