Vodafone to award $1.8 bn deal to 3 firms

After assuming the reins at the erstwhile Hutch-Essar, UK’s Vodafone Group – the world’s largest mobile services company – is set to award one of India’s largest network expansion contracts estimated to be worth about $1.8 billion jointly to three equipment vendors – Nokia-Siemens Networks, Ericsson and Motorola.

Vodafone Essar currently offers mobile services in 16 of the 23 telecom circles in the country. Sources close to the development told that the contract would be discussed at Vodafone Essar’s next board meeting in September, the date for which is yet to be finalised.

According to sources, Nokia Siemens Networks is likely to be the principal supplier of network electronics like base tower stations (BTS), base station controllers (BSC) and transcoders in 12 out of Vodafone Essar’s 16 existing circles. Motorola, in turn is slated to supply BTSs, BSCs and transcoders in the company’s Delhi, Mumbai, Kolkata and Punjab circles. As for mobile switching centres (MSC), Nokia Siemens will supply to almost all existing Vodafone Essar circles, with the exception of Mumbai metro circle where the MSCs will be supplied by Sweden’s Ericsson.

Vodafone offers second-generation cellular services in all the 16 circles. It operates in the 900 MHz band in 12 circles and 1,800 MHz band in the remaining ones.

It is learnt that Vodafone Essar has also identified locations for setting up mobile towers in some of the new circles (Orissa, Bihar, Assam and North-East) where unified access service licences are held through its wholly-owned subsidiary Vodafone Essar Spacetel. But since these would be greenfield cellular rollouts, all decisions on equipment suppliers would be taken only after Vodafone Essar Spacetel receives spectrum from the department of telecom (DoT).

Eight months have elapsed since DoT issued licences for the Spacetel circles, but it is yet to consider Vodafone Essar’s application for 4.4 MHz spectrum in each of the circles.

This network deal apart, both Nokia Siemens and Ericsson have bagged a series of major equipment contracts in India over the last couple of months. For instance, Nokia Siemens had recently bagged a $900-million network outsourcing contract from Bharti Airtel.

Just prior to that, the company was awarded the contract to upgrade the broadband network of state-owned Bharat Sanchar Nigam (BSNL). It has also received a Rs 300-crore network expansion contract from Aircel Cellular to build and operate a greenfield GSM network in Kolkata in addition to bagging a $500-million two-year network expansion contract with Idea Cellular.

Similarly, Ericsson, which recently bagged a $2-billion network outsourcing contract from Bharti Airtel, is also close to inking a $1-billion plus deal with BSNL for both 2G and 3G lines. The Bharti deal was its fourth major outsourcing deal with Ericsson in as many years.