Raja questions Ericsson’s selection for GSM tender

In Yet another twist to state-owned BSNL’s tender for 45.5 million GSM lines, telecom minister A Raja has now questioned the selection process under which Swedish telecom major Ericsson had emerged as the lowest bidder last year.

Importantly, it is also learnt that Mr Raja now wants BSNL to clarify the reasons behind US telecom major Motorola’s disqualification from the tendering process, especially when the company had quoted the lower price has compared to Ericsson.

In fact, sources said that Mr Raja has also questioned the logic of awarding the contract to Ericsson at over $100 per line when Motorola had supplied similar equipment to public sector MTNL at $69 per line. With BSNL fast running out of capacity to add new users, Mr Raja has asked the PSU to send a detailed report on the capacity crunch faced by each circle.

However, BSNL has constantly maintained that Motorola was disqualified as it failed to pass the quality tests when the tender was evaluated by its technical committee.

According to sources, BSNL, which is currently preparing a detailed reply to Mr Raja’s queries, is likely to call for a broad meeting soon to seek a formal approval of the reply before sending it to the minister.

The issue began with telecom minister A Raja asking BSNL to negotiate a lower price at less than $100 per mine with Ericsson for the $4.8 billion contract. When, Ericsson, whose bid amount was $107 refused to reduce prices any further, the minister, earlier this week had advised BSNL to drop the 3G component in the tender and thereby halve the total size of the contract to about 23 million lines.

As per this plan. BSNL was to issue a fresh tender for about 90 million lines exclusively for 3G after the 3G spectrum policy is announced. Sources said the logic behind the move was that, if the 3G component is taken out, Ericsson would be forced to cut price to $87-90 per line.