Raja clears route for 23m-line BSNL tender

BSNL can finally go ahead with its expansion plans as telecom minister A Raja on Wednesday cleared the PSU’s tender for just under 23 million GSM lines. BSNL executives said that company would place advance purchase orders with the two successful bidders — Ericsson and Nokia Siemens Networks — within the next two days.

A senior executive with the PSU also added that the tender, which has a mix of both 2G and 3G lines, would be priced between $80-85 per line. This would peg the value of the total contract in the range of $1.8-1.96 billion against the original $4.87 billion contract.

However, it remains to be seen if Ericsson and Nokia will accept this costing. The executive said the details would be communicated to both the vendors on Thursday. Motorola, which had earlier been disqualified, has expressed its willingness to participate in the new tender.

In the first phase, BSNL will place advanced purchase orders for 17.5 million lines, of which 14 million lines will be 2G and the remaining 3.5 million will be 3G, company executives said. However, the final orders for the 3.5 million 3G lines in the first phase will only be placed after the 3G policy is announced and the spectrum for it is made available, they added.

In the second phase, the company will place orders for a total of 5.5 million lines, 50% of which would be 3G enabled, BSNL sources said. The BSNL employee unions, while welcoming the move, said that they “were suspicious about the 3G part of tender”. “We are happy with the development, but will study the details closely. If there is a goof up, especially with regard to the 3G lines, we will go back to our earlier stance of launching an indefinite strike,” a union leader told.

The BSNL board on Monday had agreed to halve the size of its 45.5 million GSM lines contract to about 23 million lines, in line with the suggestion of Mr Raja. A reduction in tender size by half will result in Ericsson’s share coming down to 13.8 million lines from 27.9 million lines earlier while Nokia will get 9.2 million lines against 18.4 million envisaged earlier. The contract will be split between Ericsson and Nokia in the ratio of 60:40.

Meanwhile, the US-based network major Motorola, which was thrown out of the tender last year as it had failed to meet the stringent technical criteria, on Wednesday said it will once again join the race in case fresh bids were called. “If there is a request for proposal to the tender, we will re-bid… it all depends on specifications of the revised tender…we will certainly be in the run. We will also participate in all future BSNL tenders,” Motorola India country president Amit Sharma said here at an Assocham seminar.

Earlier in the day, Ericsson executives told the media that the company was waiting to hear from BSNL about the fate of the contract. “We are eagerly awaiting an official communication from BSNL. We have no idea about it and we do not want to comment on any speculation,” Ericsson India MD Mats Granryd told reporters after signing a $2-billion dollar outsourcing deal with Bharti Airtel.