Light Reading
BSNL's much-delayed mobile expansion is being held up again, this time by India's new communications minister

BSNL Expansion Delayed Yet Again

Light Reading
News Analysis
Light Reading
7/11/2007
50%
50%

Indian operator Bharat Sanchar Nigam Ltd. (BSNL) 's mobile network expansion is once again mired in controversy, prompting employees to strike Wednesday in protest at further delays in awarding equipment contracts.

After multiple hiccups in the bidding process, BSNL had finally been poised to place orders worth more than $4 billion for GSM equipment with Ericsson AB (Nasdaq: ERIC) and Nokia Networks in May. (See BSNL to Award $4.5B Mobile Contracts.)

But India's new IT and Communications minister, Andimuthu Raja, has taken issue with the tender negotiated under predecessor Dayanidhi Maran, and is pushing the state-run operator to renegotiate the prices quoted by the vendors. (See India Roundup: Partnerships & Politics.)

A statement on the Ministry of Communications and IT's Website says that Raja "found some discrepancies in [the] processing of GSM tenders and accordingly, advised BSNL to look into those issues in the larger interest of BSNL."

Ericsson put in a bid to supply the equipment at $107 per line, and, as the lowest bidder, it would get 60 percent of the 45.5 million lines to be installed. Nokia was the second lowest bidder at $160 per line, so it would get the remaining 40 percent if it agreed to meet Ericsson’s price.

But Raja has questioned why BSNL would award the bulk of the contracts to Ericsson, when Motorola Inc. (NYSE: MOT) is supplying GSM equipment to BSNL’s sister carrier, Mahanagar Telephone Nigam Ltd. (MTNL) , at a price of $70 per line.

Raja has also asked BSNL to clarify why it disqualified Motorola from bidding, a move that resulted in Motorola taking the operator to court. (See Moto Stalls BSNL's Wireless Tender.)

Ericsson has reportedly refused to reduce its bid further, so BSNL is now under pressure to remove an order of 3G gear that was to be included in the contracts and focus on procuring cheaper GSM equipment. Raja argues that it's unnecessary for the carrier to install 3G lines when the government is yet to agree on a 3G policy and suggests that BSNL issue a separate 3G tender at a later date. (See India on Edge Over 3G.)

BSNL could end up having to invite fresh bids from all the major vendors, including Motorola and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), which was also disqualified during the technical evaluation.

The ongoing saga led 400,000 BSNL employees to stage a one-day strike on Wednesday, demanding that the carrier award the contracts immediately. In a prepared statement V.A.N. Namboodiri, secretary general of the BSNL Employees' Union, claimed that "the intolerable delay will be the death knell of BSNL unless immediate action is taken. Not only is BSNL unable to provide new connections, but also its relevance in [the] telecom sector itself will be questionable unless immediate action is taken."

The statement notes that BSNL exhausted its capacity to provide new mobile connections in March. "BSNL was unable to provide even nominal connections during the last three months... sliding down to the fourth position" in market share, it says.

In response to the strike, the Communications and IT Ministry’s statement claims that union members are protesting "for reasons best known to them." BSNL is due to respond to Raja's queries within a week and Raja has assured the union that in making a decision on its response, "the interests of BSNL and its employees will be protected at any cost."

"During the intervening period till receipt of supplies under the tender, appropriate steps will be taken to ensure that BSNL does not suffer due to lack of network capacity," it says, without providing details.

BSNL, which has around 28 million mobile subscribers, has been attempting to kickstart this second phase of its network expansion since early 2006 as it struggled to keep pace with India's massive demand for telecom services. Carriers are now adding around 6 million new subscribers every month, prompting them to embark on massive expansion projects to increase capacity and relieve network congestion.

— Nicole Willing, Reporter, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
readlightly
50%
50%
readlightly,
User Rank: Light Beer
12/5/2012 | 3:05:26 PM
re: BSNL Expansion Delayed Yet Again
Vendors- Pay the new minister and get started. Your "investments" with the old minister have been fruitless.....woe betide the continuing saga of India's bureaucracy.
Flash Poll
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Packet Design asks network professionals how they handle the cloud, SDN, and network management.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
Is Windstream Boldly Setting a New Trend?
Carol Wilson, Editor-at-large, 7/29/2014
U-verse Growth Slips But Still Strong
Alan Breznick, Cable/Video Practice Leader, 7/24/2014
Facebook: 30% of Users Are Mobile-Only
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/24/2014
Salary Survey Report 2014
Sarah Reedy, Senior Editor, 7/23/2014
Verizon Applies 3G Throttling Policy to LTE
Sarah Reedy, Senior Editor, 7/25/2014
Like Us on Facebook
Twitter Feed